To prepare for INDIAN ECONOMY for any competitive exam, aspirants have to know about Infrastructure. It gives an idea of all the important topics for the IAS Exam and the Economy syllabus (GS-II). ImportantInfrastructure terms are important from Economy perspectives in the UPSC exam. IAS aspirants should thoroughly understand their meaning and application, as questions can be asked from this static portion of the IAS Syllabus in both the UPSC Prelims and the UPSC Mains exams.
Infrastructure is the set of basic facilities that help an economy to function & grow such as energy, irrigation, roads, railway & telecommunication.
- Infrastructure is the ‘lifeline’ of an economy as protein is the lifeline of the human body. Whichever sector be the prime moving force of an economy, i.e., primary, secondary or tertiary, suitable level of infrastructure presence is a pre- requisite for growth and development.
- This is why the Government in India has always given priority to the developmental aspects of the sector. But the level of preparedness and performance had been always less than required by the economy.
- Infrastructure provides supporting services in the main areas of industrial and agricultural production, domestic and foreign trade and commerce. These services include roads, railways, ports, airports, dams, power stations, oil and gas pipelines, telecommunication facilities, the country’s educational system including schools and colleges, health system including hospitals, sanitary system including clean drinking water facilities and the monetary system including banks, insurance and other financial institutions. Some of these facilities have a direct impact on production of goods and services while others give indirect support by building the social sector of the economy.
- Basically, the goods and services usually requiring higher investment, considered essential for the proper functioning of an economy is called the infrastructure of an economy. Such sector might be as many as required by a particular economy such as power, transportation, communication, water supply, sewerage, housing, urban amenities, etc.
- Since, infrastructure benefits the whole economy, it has been often argued by the economists that the sector should be funded by the government by means of taxation, partly not wholly.
- Indian infrastructure sector is clearly overstrained and has suffered from underinvestment in the post-reforms period.
- Infrastructure bottlenecks are always constraint in achieving a higher growth for the economy. India needs massive investment, both from the public and private sectors, to overcome infrastructure bottlenecks.
- Investments by the public and private sectors are not alternatives, but complimentary to each other as the required investment is very high.
- Public investment in the sector depends upon the ability to raise resources (capital) in the public sector and this in turn depends upon the ability to collect the user charges from the consumers.
- Some divide infrastructure into two categories — economic and social. Infrastructure associated with energy, transportation and communication are included in the former category whereas those related to education, health and housing are included in the latter.
- BASIC INDUSTRIES
- WATER & SANITATION
- Inland Waterways
- RURAL & URBAN
- INVESTMENT MODELS
Infrastructure sector received a push of Rs 5.97 trillions in the budget 2018-19 up from Rs 1.91 trillion allocated to infrastructure in 2014-15.
Infrastructure sector has following characteristics:
- Sometimes a natural monopoly g. Railways (and once upon a time even aviation and telecom sector in India).
- Sunk costs are high. It’s the investment that cannot be recovered even when the firm go out of business. e.g. If airport closed down, airstrip’s asphalt will have little or no resale value because very bulky to dig-off and transport.
- ‘Output’ is often Non-Tradable. e.g. A road / bridge / airport constructed at one place cannot be ‘transferred’ to another place unlike a box of carrots.
- Sometimes in tangible in nature g.we can’t touch spect rumor electricity.
- Consumption is often ‘Non-Rival’ in nature e.g. One person using a road or street light it doesn’t make that product ‘unavailable’ for others.
- Price Exclusion is often difficult. A rural road or street light can’t be ‘denied’ to a person who is not paying taxes or user-fees. (whereas if a person cannot afford iPhone then he is excluded from buying it.)
- Usually creates positive externality: e.g. new railway station / airport → that much more business for taxis & hotel owners in the surrounding area.
|Sectors granted ‘infrastructure’ status by Finance Ministry; Dept. of Economic Affairs.|
|Transport & Logistics:
|Roads and bridges, Ports, Shipyard, Inland Waterways, Airport, Railway, tunnels, bridges, Transport, Logistics Infrastructure.
2019-Feb: Commerce Ministry released ‘Draft National Logistics Policy’
|Energy||Electricity, Oil, Gas|
|Water & Sanitation||Water supply & treatment, Sewage/Solid Waste Management, Irrigation|
|Social & Commercial Infrastructure
|Hospitals, Education Institutions, Sports Infrastructure, Tourism infrastructure -hotels, ropeways and cable cars etc.
Industrial Parks, food parks, textile parks, SEZ etc.
Cold storage, Soil-testing laboratories
Benefits of getting “Infrastructure Status” to any sector:
- Govt could give them tax benefits, lease public land at a token price, faster environment clearance, automatic FDI approval
- RBI could help them by relaxing the External Commercial Borrowing (ECB) norms, Debt restructuring (e.g. RBI’s 5/25 rule), Changing PSL norms etc.
- SEBI could relax norms for REITS/InvITs funds to help them mobilize capital easily for the infrastructure sector.
- IRDAI & PFRDA could oblige insurance and pension companies to invest minimum % in infrastructure companies etc.
- They could get easier funding from World bank & other multilateral banks.
Relation Between Infrastructure & Economic Development:
- Increase in investment: The development of agriculture to a considerable extent depends on development of irrigation, power credit, transportation, marketing, education and training, research and development and other facilities.
- Industrial development: It also depends on a sound infrastructure base to a large extent.
- Employment generation: Infrastructure improves mobility, productivity and efficiency of labour.
- Trade & commerce: Infrastructure facilities play a vital role in the development of trade and commerce. In fact they act as a platform for the expansion of trade and other commercial activities at a rapid speed.
- Thus, infrastructure development can have a significant impact on economic growth. For low income countries, basic infrastructure such as water, irrigation and to lesser extent transport are important. As the economies mature into middle-income category, the share of power and transport and telecommunications in infrastructure and investment increases.
- Also, infrastructure not only contributes towards the development of backward regions and removal of regional imbalance but also acts as an instrument of social change. Extensive studies undertaken by the World Bank show that 1% increase in investment in the stock of infrastructure leads to a corresponding 1% increase in the GDP of a nation.
INFRASTRUCTURE: MINING AND BASIC INDUSTRIES
Basic industries are industries which supply their products to manufacture other goods. Examples: Iron and steel, copper, aluminium, chemical etc.
|Capital goods industries||Goods that are used in producing other goods e.g. textile machinery, conveyor belts, mining equipment etc.|
|Heavy industries||Producing large and heavy products e.g. Ship building, bulldozers, industrial machinery, electric transformers etc.|
Ministry of Heavy Industries & Public Enterprises:
|· Department of Heavy Industry
· Department of Public Enterprises: is responsible for:
1) Allotting Ratna Status
2) Conduct Public Enterprises Survey
|· National Automotive Testing and Research and Development Infrastructure Project (NATRiP) – implements FAME-India project for faster adoption of electric vehicles.|
|· Bharat Heavy Electricals Ltd. (BHEL) etc.
· Cement Corporation of India Ltd.
· Hindustan Newsprint Ltd
· Scooters India Ltd.
· Bridge & Roof Co, Engineering Projects (India), Bharat Pumps and Compressors Ltd.
Ministry of Steel
|· Steel Authority of India Ltd (SAIL)
· Rashtriya Ispat Nigam Ltd (RINL)
· National Mineral Development Corporation (NMDC) iron ore.
· Salem Steel Plant (Tamilnadu), Bhadrwati Steel Plant (Karnataka), Ferro Scrap Nigam Ltd, & a few misc.
|China (54%)||India (6%)||Japan
Purvodaya Initiative (2020)
- The eastern states of India (Odisha, Jharkhand, West Bengal, Chhattisgarh, and Northern Andhra Pradesh) are home to 80% of Indian iron reserves.
- Purvodaya Initiative aims to setup new steel plants, transport infrastructure to create an integrated steel hub in the Eastern India.
- Nodal Ministry: Steel Ministry will coordinate with other Central Ministries, State Governments and Private Players.
Ministry of Chemicals & Fertilizers:
|· Department of Chemicals and Petrochemicals
· Department of Fertilizers
· Department of Pharmaceuticals
|· Fertilizers Industry Coordination Committee (FICC).
· National Pharmaceutical Pricing Authority (NPPA)
|· These bodies are set up under either Societies Registration Act or Multistate Cooperative Societies Act.
· Multi State Cooperative Societies: IFFCO, KRIBHCO
· Bureau of Pharma PSUs of India(BPPI) for supplying medicines to PM Jan Aushadhi Kendras.
· National Institute of Pharmaceutical Education Research (NIPER)
· Central Institute of Plastics Engineering & Technology (CIPET), Ranchi
|· Hindustan Insecticide Limited (HIL) – Responsible for mfg. of Di- chloro-di-phenyl-tri-chloro-ethane (DDT) for mosquito control in Nation vector borne disease control program
· Hindustan Antibiotics
· Karnataka Antibiotics & Pharmaceuticals Limited (KAPL)
· Bengal Chemicals and Pharmaceuticals Ltd. (BCPL)
· Hindustan Fluorocarbon Ltd
Ministry of Petroleum & Natural Gas
|· Directorate General of Hydrocarbons: regulator for the upstream activities i.e. oil and gas exploration and production activities.
· 2018: proposal to give it statutory status was rejected.
|· 2006’s Act: Petroleum and Natural Gas Regulatory Board: regulator for the downstream activities i.e. laying of pipelines and fuel marketing|
|· Bharat Petroleum Corporation Limited
· Hindustan Petroleum Corporation Limited
· Engineers India Limited – consultancy services for petroleum refineries and other industrial projects.
· Gas Authority of India, Indian Oil Corporation, Oil India,
· Oil & Natural Gas Corporation (ONGC),
· ONGC-Videsh Ltd (OVL) – associated with foreign exploration projects like Sakhalin (Russia), Al-Furat (Syria), Greater Nile (Sudan), San Cristobal ( Venezuela).
ES:2016-17 on Petroleum And Gas Reserves
- Dutch Disease: Discovery of Natural Gas in Netherlands resulted into Higher inflow of Foreign Currency ($) for import, investment, bribes to win oil exploration rights which made Local currency strong → Non-Energy Exports decline (Agri, textile etc.) → farmer shift to work in oil/gas wells & refineries. This resulted into food shortage and resultant hyperinflation and so the food riots.
- Resource Curse or Paradox of Plenty: Venezuela ranks 1in oil reserves in OPEC group yet food riots. Because of ‘Dutch Disease’.
- Resource Curse in context of India: Chhattisgarh, Jharkhand have large mineral wealth which resulted into mining mafia, Naxalite, politician nexus, bribery, corruption, ransom, rent- seeking. This led to prevalence of high level of poverty, malnutrition.
|Q. Find correct statements: (CSE-19)
Ministry of Mines
Mining sector in India contributes about 2.1% to our GDP. India has huge mineral potential, especially in relation to iron ore, bauxite, coal, diamonds, and heavy minerals sand. But only 10 percent of the potential area has been explored and 1.5 percent is being mined.
|· National Mineral Exploration Trust
· Geological Survey of India
· Indian Bureau of Mines
|· National Aluminum Company Limited (NALCO), Bhubaneswar;
· Hindustan Copper Limited (HCL), Kolkata;
· Mineral Exploration Corporation Limited (MECL), Nagpur.
Autonomous bodies / Trusts
|· National Institute of Rock Mechanics
· Kolar Gold Fields (KGF, Karnataka),
· Districts Mineral Foundations (DMF) in mining districts.
· National Institute of Miners’ Health (NIMH in Karnataka).
· Although in 2020, Government announced to merge it with Health Ministry’s ICMR-National Institute of Occupational Health (NIOH, Ahmedabad, Guj)
|Q. Find correct statement(s) about minor minerals in India:__________(CSE-2019)
(a) 1 and 3 only
(b) 2 and 3 only
(c) 3 only
(d) 1, 2 and 3 only
Constraints in mineral exploration:
- Shortcomings in the licensing regime such as the separation of auction of prospecting licences and provision of mining licences, and the different auction methodologies across different sectors like coal, oil and minerals.
- Heavy cost of acquiring land.
- High incidence of taxes, royalties and levies in comparison to global standards.
- Monopoly of state owned companies in few sectors like coal is leading to inefficiencies.
- Old and obsolete technology, low skilled manpower, low output etc.
- Inadequate infrastructure resulting in evacuation problems. Ex: Rathole mine accident in Mizoram.
- Poor connectivity through inland waterways means over reliance on railways for transportation and thus increased transportation costs as well as delays.
- Environmental concerns like open cast mining which is highly polluting has become a norm for almost all mining activities.
- Rehabilitation issues of tribals and other communities.
- Non-uniform distribution of minerals as well as unmapped reserves.
- Political nexus encouraging corruption through non-transparent auctioning is another challenge.
- Social issues like child labour, exploitation of workers, lack of safety measures, etc.
National Mineral Policy (NMP) 2019:
- Nodal agency: Mining Ministry
- NMP 2019 aims to replace 2008’s policy.
- Target: For non-fuel and non-coal minerals
- will allow transfer of mining leases from one company to another, help in their merger and acquisition.
- will grant ‘industry’ status to mining. (so they become eligible for certain tax benefits / schemes meant for industry sector, if any.)
- Increase the production of major minerals by 200 percent in seven years by granting industry status to mining.
- Attract private investment through various incentives like financial package, right of first refusal at the time of auction etc.
- Introduces the concept of Exclusive Mining Zones, which will come with in-principle statutory clearances for grant of mining lease so as to curtail delay in commencement of mining operations.
- Simplifies the clearance process and make it time bound for mineral development and commencement of mining operations.
- Encourages merger and acquisition of mining entities, and transfer of mining leases to ensure seamless supply of ores and scaling up of business.
- Identify critically fragile ecosystems and declare such areas as “no-go areas”/ “inviolate areas”.
- Incentivising use of renewable sources of energy at mining sites to reduce pollution, carbon footprint and operational costs.
- Appropriate sensitization training about environmental issues to all workers involved in mining operations.
- Scientific mine closure to ensure restoration of ecology and regeneration of biodiversity.
Mines and Minerals Development and Regulation Act, 2015:
- MMDR Act 2015 replaced the 1957’s act for EoDB.
- Mining Lease will be granted only through auction. No discretionary allotment to any company.
- Mining Lease shall be given for 50 years, then it will be put up for auction (and not renewal unlike the earlier system).
- Establish a National Mineral Exploration Trust. Mining companies required to pay them. It will carry out exploration of minerals.
- Establish ‘Not-for-Profit Trusts’ District Mineral Foundations (DMF) in all districts where mining takes place. Mining company required to pay them in Rupees.
- DMF will be use it for the welfare of people in the district who are affected by the mining related operations. State govt to prescribe the administrative structure and guidelines of DMFs.
- Higher penalties and jail terms for illegal mining.
|Q. What is/are the purpose/purposes of ‘District Mineral Foundations’ in India? (CSE-2016)
(a) 1 and 2 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Other steps by Govt.
- Mining Surveillance System (MSS) has been launched to check illegal mining.
- E-auctioning of exploration blocks replaces the current first-come- first serve basis of allocation will ensure transparency and
- Auctioning of exploration blocks on revenue sharing basis rather than production sharing basis is a win-win for both government and the private sector.
- The policy suggests setting up of National Central for Mineral Targeting (NCMT) to address the exploration challenges.
Effective implementation of the policy will surely revamp mining sector in India. However, other issues like strengthening EIA, labour exploitation, involving civil society need to be addressed.
- Top five largest coal reserves: USA > Russia > China > Australia > India
|Highest moisture content. smoke pollution. Most inferior in energy.||40|
|Lignite /Brown Coal||Important states: TN (Neyveli), Gujarat, Rajasthan||40-60|
|Upon heating, it releases a liquid called Bitumin.
Imp states: Chattisgarh, Jharkhand, WB, MP, Odisha
|Anthracite||Burns with short blue flame, lowest moisture content, highest energy.||80-90|
|Attached||Coal Controller’s Organization|
|· Coal India Ltd (CIL) & its subsidiaries. HQ: Kolkata, Maharatna company, single largest coal producing company.
· Neyveli Lignite Corporation, Tamil Nadu.
· Singareni Collieries Company Limited: Telangana Govt 51%: Union: 49%
|Statutory||Coal Mines Provident Fund Organization|
- Coal Mines Nationalisation Act (1973): Coal India and other CPSEs took over private coal mining companies. They will dig coal, sell it to thermal power plants & other industries.
- In 1993, Private mining allowed for only for captive use i.e. industrialist wanting coal for his own steel, cement, aluminium etc. manufacturing processes. In 2014, SC cancelled coal block allocations.
- Coal Mines Special Provision Act (2015): It opens up commercial coal mining for both private and public entities, and thus ends monopoly of Coal India.
Mineral Laws (Amendment) Ordinance 2020
Ordinance aims to amends:
- Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act)
- Coal Mines (Special Provisions) Act, 2015 (CMSP Act).
|Before ordinance||After ordinance|
|Only companies related to iron and steel, power and coal sectors can do bidding in the coal mining auction||Any India-registered company. So it’ll also encourage competition and attract FDI in such Indian companies
|Prior experience required before bidding||No such requirements|
|Separate licenses for
|Single/Composite license called ‘prospecting license-cum-mining lease’|
SHAKTI Coal Policy (2017):
- Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India (SHAKTI).
- Nodal Agency: Coal Ministry.
- Previously, it was discretion of the govt. that which thermal power plant company will get how much coal from Coal India
- Shakti Policy replaces that discretion with an online centralised bidding process.
- Coal Mitra App by Power Ministry to help companies in buying / selling coal.
- UTTAM App by coal ministry to monitor coal quality coming from a particular mine.
|Q. Find correct statement(s):____ (CSE-2019)
(a) 1 only
(b) 2 and 3 only
(c) 3 only
(d) 1,2 and 3
Economic survey observations:
- Carbon Imperialism is a modern day type of imperialism wherein the 1st world nations are trying to enforce their views about energy-consumption upon the 3rd nations with hidden agenda to:
- To sell their nuclear fuel and technology.
- To portray the third world in bad light for using coal power and thereby reducing their own culpability for global warming.
- For India coal based electricity is a necessary evil because:
- Wind and solar power are Non-dispatchable, meaning electricity can be generated only when there is fast wind blowing or there is appropriate sunshine
- Land requirement for solar based powerplant is 10 times that of thermal power plant.
- Bottlenecks in acquiring nuclear fuel and nuclear Technology
- Unemployment if we shut down coal mining & thermal plants.
Budget-2020: Some of Indian thermal power plants that are old and their carbon emission levels are high. Govt. is planning to close them & use their vacated land for alternative use.
Pradhan Mantri Khanij Kshetra Kalyan Yojana (2015):
- Nodal Agency: Mining Ministry.
- It aims to use the funds of the DMFs to complement the ongoing union and state schemes in that area, related to like drinking water supply, health care, sanitation, education, skill development, women and child care etc.
Star Rating Of Mines, 2016:
- Indian Bureau of Mines (Ministry of Mining) gives 0-5 Star to a mine depending on whether the mining company is working without adversely affecting the social, economic and environmental well- being of present and future generation.
- Mining Surveillance System (MSS): satellite-based system by Indian Bureau of Mines under Mining ministry.
- Khan Prahari App: Ministry’s app for reporting illegal coal mining.
- Transparency, Auction Monitoring and Resource Augmentation.
- To do ‘legal’ mining, entrepreneur has to obtain approvals and participate in the mining block auctions.
- For this purpose, Mining ministry launched TAMRA Portal in 2017.
PRAKASH Portal (2019)
- Power Rail Koyla Availability through Supply Harmony portal launched jointly by Power Ministry and Coal Ministry
- To connect the Coal mining companies, Railways and Thermal Power Plants on a single platform. It will ensure better supply chain management.
- Electricity is a key element in modern day life. Right from running irrigation pumps to charging mobile phones, electricity is a prerequisite for agricultural growth and digital connectivity.
- Greater access to energy improves both economic growth and human development of a country.
- India is the fourth largest consumer of energy in the world after USA, China and Russia. However, India is not endowed with abundant energy resources. It must, therefore, meet its development needs by using all available domestic resources of coal, uranium, oil, hydro and other renewable resources, and supplementing domestic production by imports.
According to the International Energy Agency (IEA), nearly 240 million Indians lacked lack access to electricity in 2017. By 2018, India has electrified all the villages. Despite this, many Indians continue to linger in the dark.
- India’s energy mix is dominated by coal with a 49.6 percent share, followed by oil (28 percent), biomass (11.6 percent), gas (7.3 percent), renewable and clean energy (2.2 percent) and nuclear energy (1.2 percent). On energy supply, India is still heavily dependent on petroleum imports to meet its requirements. India imported approximately 82 percent of crude oil and 45 per cent of natural gas requirements during 2017. India also import 200 million tonnes of coal.
- In the power sector, the all-India installed power capacity is about 334 GW, including 62 GW of renewable energy. Renewable energy constitute almost 16% of total installed capacity.
- Make available 24×7 power to all by 2019.
- Achieve 175 GW of renewable energy generation capacity by 2022.
- Reduce imports of oil and gas by 10 per cent by 2022-23.
- Continue to reduce emission intensity of GDP in a manner that will help India achieve the intended nationally determined contribution (INDC) target of 2030.
- In the coal sector, the government has recently in 2018 allowed commercial mining.
|India’s present electricity mix (Feb 20) consists of:|
|Thermal Electricity: Coal > Gas > Diesel Oil)||63%|
|Renewable Energy: (Solar, Wind, Biomass etc. except hydro)||23%|
Though India accounts for about 18 percent of world’s population. India’s per-capita energy consumption of only about 1/3rd of the global average.
Ministry of Power:
|· Central Electricity Authority (CEA) prescribes the standards for construction of electrical plants, electric lines etc.
· Central & State Electricity Regulatory Commissions for fixing the electricity tariff (prices).
· Appellate Tribunal for Electricity (APTEL)
· Bureau of Energy Efficiency (BEE);
· Damodar Valley Corporation (DVC);
· Bhakra Beas Management Board
|PSUs||· National Thermal Power Corporation (NTPC)
· National Hydroelectric Power Corporation (NHPC)
· Power Finance Corporation (PFC)
· Power Grid Corporation of India (POWER GRID)
· Power System Operation Corporation Limited (POSOCO)
· Energy Efficiency Services Limited – joint venture of NTPC Limited, PFC, REC and Powergrid- known for its subsidized UJALA LED bulbs
· THDC India Limited: Tehri Hydro
· Rural Electrification Corporation- known for DD Gram Jyoti.
· North Eastern Electric Power Corporation (NEEPCO)
Constraints in Power Sector:
- Poor financial health of DISCOMs: Only 11 states have subscribed to UDAY scheme till now to close the gap between tariffs and cost of procurement.
- Transmission losses and power theft: Transmission and Distribution losses in the country are around 23%. This increases the average tariff to be charged to recoup losses. Power theft is very common.
- Finances: Project cost over runs and high lending rates are inimical to the growth of power sector in the country. Power sector and Discoms are among the sectors that have contributed the highest to NPAs.
- Fuel: CIL accounts for around 80% of the domestic coal requirement by coal based power plants, leading to dependence on imported coal.
- Land: Concerns regarding land acquisition, environmental clearance and consequential delays and project overruns. High cost of renewable energy devices, especially for households.
- Unmetered: Unmetered power supply to agriculture provides no incentive to farmers to use electricity efficiently.
- Old plants: Old inefficient plants continue to operate whereas more efficient plants are underutilised.
- Complexity of tariff structures: Presence of different tariffs for different sectors leads to inefficiency and confusion. Simplification of tariffs with, perhaps no more than 2-3 tariff categories, will improve transparency.
- Centre-state cooperation: According to DDUGJY centre provides the infrastructure, the State provides the power after working out its availability. But sometimes the relationship is not harmonious.
National Electricity Distribution Company:
- Objective: electricity distribution business on a pan-India basis.
- had announced 24×7 power to all by 2022. But, since private and State- Government owned electricity distribution companies are suffering NPA AND debt issues, the electricity distribution sector is not expanding fast enough to achieve this target.
- So, in 2019, NTPC and Power Grid Corporation of India have formed a 50:50 joint venture company: National Electricity Distribution Company.
One Nation-One Grid:
- Initially, individual states’ electricity grids were interconnected to form 5 regional grid regions namely Northern, Eastern, Western, North Eastern & Southern region. If a state had surplus electricity, it could sell only to other states in that region.
- So, One Nation-One Grid concept aims to connect all 5 regional grids into one national grid so, electricity can be transferred from surplus region to deficient region.
- Here buying-selling of surplus electricity is done through power exchanges like – Power Exchange of India (PXIL) and India Energy Exchange (IEX).
- Nodal Agency: Power Grid Corporation of India Limited (Power ministry)
Grid: Green Energy Corridor Project:
- Nodal Agency: Power Grid Corporation of India Limited (Power ministry) along with loan support from Asian Development Bank.
- Project will enable the flow of renewable energy into this National Grid Network. So that renewable energy rich States like Rajasthan (solar), Tamil Nadu (wind) can sell the electricity to other states.
- Power Ministry’s Garv & Garv-II apps to monitor progress of how many villages electrified under DD Gram Jyoti Yojana.
- Power Ministry’s DEEP portal to help DISCOM companies buy electricity from thermal plants through auction.
- Power Ministry’s Vidyut PRAVAH & MERIT app & to let people know how much electricity is generated in India, vs. current price, demand & shortages, inter-state purchase of electricity etc.
- Power Ministry’s Urja Mitra App to notify users about upcoming electricity outages.
- Power Ministry’s TARANG App to monitor upcoming power projects & stalled projects.
- National Power Portal (NPP) of Central Electricity Authority (CEA) (Power Ministry), where above Apps’ data can be displayed.
Integrated Power Development Scheme:
- Nodal Agency: Ministry of Power (2014).
- IPDS is Central Sector Schemee. 100% funded by Union.
- Target – To strengthen power infrastructure, especially in urban areas.
- All Electricity Distribution Companies (Discoms) are given financial assistance for improving distribution network, installing ICT enabled smart meters for billing and collection. Install solar panels if not possible to join an area with grid.
Prepaid Smart Meters for Electricity:
- A smart prepaid meter has an internet modem.
- Electricity companies can remotely connect with them, supplying the electricity as per the amount of rupees balance left in the device.
- Electricity usage data collected in a server which will in turn reduce the scope of electricity theft by tempering with the meter box.
Budget-2020: Govt. will try to replace conventional energy meters by prepaid smart meters in the next 3 years
NPA and UDAY(2015)
Nodal Agency: Ministry of Power (2014).
During UPA era, DISCOMs were suffering losses because:
- Floods and cyclones, environmental activism by NGT and SC, scams in coal allocation, so coal mining declined which made Coal even more expensive. As a result, thermal electricity production became expensive.
- Under the Electricity Act 2003, Central Electricity Regulatory Commission regulate the price of Inter-State sale of electricity. While State Electricity Regulatory Commissions regulate the price of intra-state sale. The electricity price slabs are kept different for industrial use, household use and agriculture use. And to keep the farmers happy, agriculture electricity will be subjected to lower tariffs. Electricity thefts rampant but State Govts ignore it for vote bank politics.
- While electricity production was become more expensive because of decline in coal mining, but Electricity commissions will not increase the prices in a corresponding manner so DISCOM were making huge losses. To lessen burden, Govt. launches a scheme to help them called, ‘Ujwal Discom Assurance Yojana’ (UDAY).
- Target – Financial revival of DISCOMs via following method:
- State government will take over 75% of the debt in a phased manner. (optional for States to do this)
- To repay this debt, State govt. will mobilize funds issuing bonds in the market. These bonds will be non-SLR in nature.
- Union will give them extra funding for Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Integrated Power Development Scheme (IPDS), and other such schemes of Ministry of Power and Ministry of New and Renewable Energy.
Challenges in Uday:
- Electricity is not a central subject, and states cannot be made to participate in the programme.
- Also, the Centre is not providing any monetary assistance.
- State governments are expected to convert the discoms debt into bonds. Finding buyers for such bonds might prove difficult especially since these would not enjoy SLR status.
- Besides, there is nothing in the scheme to fix the perverse political incentive that leads to T&D losses and debts in the first place.
Pariwartan (2018): (proposed)
- Power Asset Revival Through Warehousing and Rehabilitation (PARIWARTAN)
- Rural Electrification Corporation (REC) & other public sector entities will create an Asset Management Company (AMC) to take over the NPA-assets of power sector companies. Since it’s at a proposal stage, so we need not lose much sleep over exact mechanism.
Deen Dayal Gram Jyoti Yojana (2015):
- Nodal Agency: Rural Electrification Corporation-REC (2015) (Ministry of Power)
- Central Sector Scheme i.e. 100% funded by Union.
- In India, there is broad lack of rural lighting which led to more use of kerosene lamps. This results in increased pollution, import bill, subsidy bill and health hazards.
- So, UPA launched Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) which restructured as DDUGJY by present Govt.
- Target: 24×7 uninterrupted ‘metered’ electricity supply to each rural household by 2022, in following way:
- Separate feeder lines for rural households vs agricultural use.
- Strengthen sub-transmission and distribution network to reduce power losses.
- Install electricity meters.
PM Sahaj Bijli Har Ghar Yojana (SAUBHAGYA):
- Nodal Agency: Rural Electrification Corporation-REC (2017) (Ministry of Power)
- Central Sector Schemee. 100% funded by Union. (100% in the sense that State government is not required to contribute money, although for the remainder project.
- Target: To give electricity connections to all remaining un-electrified households in rural and urban areas. Scheme also aims to provide 24*7 power supply for all by 2019.
- Based on SECC-2011 data, govt. will identify beneficiaries, give them free electricity connection with meter.
- If for a household in remote area is not possible to join with grid connected electricity lines, then solar cell, DC battery pack, LED lights will be given.
- REC gives 75-90% of project cost as grants to DISCOMs (public and private), state electricity departments etc.
- Grant percentage depends on whether General or Special Category state, & how much progress achieved.
- As of march 2019: All the States have reported 100% electrification of all households except few households in Naxal affected region of Chhattisgarh.
Need for revision of power policy:
- Discoms in a financial crunch need to be bailed out by banks and need refinancing every time due to distorted subsidy regime which is the result of populist pressure to keep tariffs low.
- Irregular access of electricity to domestic and industrial consumers, power cuts and irrational tariffs.
Provisions of the new power policy
- Rationalisation of tariff for end consumer, letting DISCOM pass on some of the additional costs to the consumer as a result of any cess levied on them.
- Compulsory procurement by Discoms from waste-to-energy plants.
- There will be an increase in charge of electricity, in tune with current inflation, cost of production and other losses.
- Surplus power will be e-actioned, helping in utilising full capacity of plant.
- Enabling micro-grids and their integration into the national grid creating an veritable market for electricity. Targeted to ensure 24/7 power supply by 2021-22, through installation of micro grid in remote villages.
- It will make mandatory for coal and lignite thermal plants to install renewable energy system to fulfil their power needs and supplement production.
- Access to clean, reliable and affordable energy increases the ease of living, improves education and human development.
- Therefore, India required to provide it to all, under SDG Goal-7
|ELECTRICITY: ENERGY EFFICIENCY|
The term energy efficiency means using lesser amount of energy to produce a given amount of output. For example, LED light bulb requires less energy than an incandescent light. Thus LED is more energy efficient than incandescent lights. Following reforms have been taken in this regard:
- Nodal Agency: Bureau of Energy Efficiency (BEE), Power Ministry.
- Environment Ministry’s National Action Plan on Climate Change (NAPCC: One of its 8 components is National Mission for Enhanced Energy Efficiency (NMEEE) – PAT .
- Under Perform Achieve and Trade (PAT) mechanism: 8 energy intensive industries are given ‘quotas’ Thermal Power, Aluminium, Cement, Fertilizer, Iron-steel, Pulp-paper, Textiles and Chlor-alkali.
- Identified sectors have to cut their energy consumption according to the quotas, else face penalties.
- Overachieving firm can obtain Energy Saving Certificates (ESCerts) from BEE’s PATNET portal and sell it to the underachieving firm (similar to PSLC certificates).
- Central Electricity Regulatory Commission (a statutory body) regulates the prices & purchase procedure.
National LED Programme:
Nodal Agency: Power Ministry gives funds to Energy Efficiency Services Ltd (EESL) for:
- Unnat Jeevan by Affordable LEDs and Appliances for All (UJALA) for subsidized home Light-emitting Diode (LEDs) bulbs. Previously called DELP (Domestic Efficient Lighting Program, renamed in 2015).
- Street Lighting National Program (SLNP): whereas EESL replaces conventional halogen street bulbs with LED street bulbs, free of cost.
|Ø Atal Jyoti Yojana (Ajay): FREE Solar Street Light with LED in Special category states
Ø 5 states – Assam, Bihar, Jharkhand, Odisha and Uttar Pradesh.
Ø NITI Aayog’s Aspirational districts in other states as well.
Ø Andaman Nicobar and Lakshadweep
Ø Funding: MNRE 75% + 25% from MPLADS of given constituency.
|Ministry of Power and Ministry of Textiles give money to Energy Efficiency Services Limited (EESL) and give energy efficient instruments to small and medium Power looms to reduce their energy consumption.|
|Star Labelling||To help the customer to use energy efficient appliances.|
|Smart Electricity Meters
|Ø Energy Efficiency Services Ltd. (EESL) helps DISCOMs to install Smart Electricity Meters.
Ø Advantages: IT enabled monitoring, no need to manually read the meters, power theft difficult etc.
|Methanol Economy Fund
|To use ‘less’ petrol & diesel in transport & electricity generators:
Ø Methanol is can be generated from bio waste. It is the simplest alcohol and does not emit particulate matter (PM), Sulphur or nitrogen pollution.
Ø NITI Aayog proposed (2017) to setup a Methanol Economy Fund to finance R&D in this area.
|Ø 2003: Oil Companies to blend upto 10% of ethanol in Petrol, by 2022.
Ø 2019: “Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran Anukool fasal awashesh Nivaran) Yojana” for providing funding to second generation (2G) bioethanol projects through Viability Gap Funding (VGF).
Ø Nodal: Petroleum Ministry.
Ø 100% Union funded.
|BEE’s National strategy document titled UNNATEE (Unlocking NATional Energy Efficiency Potential) for developing an energy efficient nation (2017-2031).|
|2018: BEE launched the Eco-Niwas Samhita for minimum energy conservation standards in Residential Buildings.|
Index related to Electricity
|Energy Transition Index:
|· World Economic Forum’s index to measure countries on how much CO2 / pollution is generated while producing energy, And whether the country is serious about reducing it.
· Ranking 2019 (March): Sweden ranked-1, India–76).
|State Energy Efficiency Index 2019
|Developed by Power Ministry’s Bureau of Energy Efficiency (BEE) in association with a non- profit body called Alliance for an Energy Efficient Economy (AEEE).|
Way forward: Energy Efficiency
- Under the Paris agreement, India has pledged to reduce the emissions intensity of its GDP by 33-35% by 2030. Energy efficiency is a crucial factor in this. Aforementioned initiatives will help in a long way to achieve our promises under Intended nationally determined contributions (INDC) under UNFCCC’s Paris agreement.
- Promote the use of the public transport Public transport systems may be converted to electric in a time bound manner.
- For the MSME sector, BEE should develop cluster-specific programmes for energy intensive industries to introduce energy efficient technologies.
United Nations Framework Convention on Climate Change (UNFCCC)’s Paris Accord (2015) requires nations to submit their Intended Nationally Determined Contribution (INDC or NDC) about their global warming mitigation commitments. India’s NDCs are as following:
- By 2030, Govt. reduce emission intensity of GDP by 33-35 % from 2005 level.
- By 2030, 40% of our installed power generation capacity shall be from non-fossil fuel sources.
|Type||Solar||Wind||Biomass||Small hydro||By 2022|
Ministry of New and Renewable Energy:
MNRE consists of:
|· National Institute of Solar Energy (NISE)- Gurugram
· National Institute of Wind Energy (NIWE).
· Sardar Swaran Singh National Institute of Renewable Energy (SSS NIRE).
|· Indian Renewable Energy Development Agency (IREDA) – Delhi, MINI Ratna.
· Solar Energy Corporation of India (SECI) – Delhi
KUSUM (Solar for farmer) 2019
Nodal Agency: Ministry of New and Renewable Energy. Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) has components A, B, C but the gist of the matter is:
- Farmers are encouraged to install Solar pump tube wells for irrigation so there will be less diesel consumption in pump sets.
- Farmers, panchayats, cooperatives can install upto 2 MW renewable power plants in their barren or cultivable lands.
- Above people can sell the excess electricity to the DISCOMS. Its price will be decided by the respective State Electricity Regulatory Commissions (SERC).
- Funding: Union 30% + State 30% + Bank Loan 30% + 10% by the farmer himself
- Benefit: Consumption of Diesel & Thermal electricity will decline to the tune of 27 million CO2 emission reduced / per year.
Jawaharlal Nehru National Solar Mission 2008:
- One of mission among 8 National Action Plan on Climate Change (NAPCC) missions.
- Nodal Agency: Ministry of New and Renewable Energy (MNRE)
- N. National Solar Mission launched in 2009-10.
- Mission aimed to add 20,000 MW solar power by 2022.
- Modi Govt. raised target to 1 lakh MW (100 GW) by 2022.
- Out of that 100 GW from 40 GW Rooftop solar panel and 60 GW through Large & Medium Scale Grid Connected Solar Power Projects.
Net-metering i.e. residential and commercial customers generate their own electricity from rooftop solar power and sell excess of this solar electricity to DISCOM.
“ARUN” Mobile app to help people install rooftop solar panels by themselves.
Amending Electricity Act for Renewable Purchase Obligation (RPO) & Renewable Generation Obligation (RGO):
Renewable Purchase Obligation (RPO) applicable to:
- Power distribution companies, large electricity consumers and captive power plants.
- They are obliged to buy min. “%” of the electricity from renewable energy sources.
- This ensures solar, wind and other renewable power producers receive sufficient of consumers and market demand. This “%” quota is decided by the MNRE.
- First time setup in 2014 (11.50%, With internal bifurcation for solar and non-solar)
- This mechanism is called Renewable Purchase Obligations (RPOs). Its prices are decided by CERC/SERC depending on whether its Interstate or intrastate sale.
SARAL INDEX for Solar rooftop
- Jointly developed by Ministry of New and Renewable Energy (MNRE), Shakti Sustainable Energy Foundation (SSEF), Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Ernst & Young (EY).
- State Rooftop Solar Attractiveness Index (SARAL) ranks the States for their attractiveness for rooftop development.
- Ranking 2019: Karnataka > Telangana > Gujarat > Andhra Pradesh
Pratyaksh Hanstantrit Labh (PAHAL-2015):
- Nodal Agency: Ministry of Petroleum and Natural Gas. Central sector scheme i.e. 100% funded by Union.
- Manmohan govt. started pilot project in selected districts.
- Modi launched for all India in 2015
- Previously, LPG dealers would divert the subsidized LPG cylinders to restaurants so households would be deprived & forced to purchase LPG cylinder at a higher price in the black market.
- Direct Benefits Transfer For LPG (DBTL): Beneficiary buys cylinder at market price, Petroleum ministry directly transfers subsidy amount in his bank account linked with his customer ID.
- A beneficiary is eligible to get subsidy on upto 12 cylinders per year. Although economic survey suggested it should be reduced because most household don’t need more than 10 cylinders in real life.
Pradhan Mantri Ujjwala Yojana (PMUY)
- Ordinarily, a customer has to pay about 1000 Rs as refundable security deposit to get the LPG connection from Oil Marketing Company
- Scheme gives Deposit-free LPG connections to the women of Below Poverty Line (BPL) families.
- The BPL families are identified using SECC-2011 data. Later, the beneficiary list was expanded to cover the forest dwellers, people residing in Islands etc. whose name may not be in SECC- 2011 data.
- Nodal Agency: Petroleum Ministry pays to OMC.
- Central Sector scheme i.e. 100% funded by Union.
- Himachal Pradesh had become the first state in the country to have “100% LPG gas coverage” in 2019.
- Corona Lockdown 2020 – poor families’ income slashed, so can’t afford to pay for cylinders so, PMUY beneficiaries eligible for 3 free LPG cylinders upto June 2020.
|PM LPG Panchayat Scheme||It is a gathering of 100 LPG customers in an area, they will discuss LPG benefits, women empowerment. Petroleum Ministry aimed to organize 1 lakh such Panchayats across India by 31/3/2019.|
|PM Urja Ganga 2016
|· To lay down Natural Gas Grid Pipeline across 5 states, viz. UP, Bihar, Jharkhand, Odisha & West Bengal.
· The supply of such Piped Natural Gas (PNG) can help homes, hotels, fertilizer companies & electricity companies.
· Helps creating a gas based economy.
|DBT in PDS Kerosene (DBTK) 2016
|· Nodal Agency: Ministry of Petroleum and Natural Gas. Central sector scheme i.e. 100% funded by Union.
· Principle is same as PAHAL -LPG. Kerosene is sold at market price and subsidy transferred to poor family’s bank account. This discourages PDS shopkeeper from diverting subsidized kerosene to the rickshaw-wallas and others.
· Govt. is trying to cover more poor families under the LPG and electricity schemes so in future they will not require subsidized kerosene for cooking and lightening purpose. Thus, India will become ‘kerosene free’.
|City Compost Scheme (2016)||· Ministry of Chemicals and Fertilizers pays subsidy to entrepreneurs to create compost from city (municipal) waste.|
|· Its a sub-component of Swachh Bharat mission (Gramin). Core Scheme, not 100% funded by Union.
· Nodal: Dept of Drinking Water and Sanitation.
· (GOBARdhan) scheme helps farmers & rural entrepreneurs to convert cattle dung & other biowaste to biogas and organic manure.
· Depending on the population of the gram panchayat, they will be given up to ₹ 20 Lakh to setup such project.
|CBG: SATAT (2018)
|· Bio-gas is produced naturally through anaerobic decomposition of agriculture residue, cattle dung etc.
· After Purification and Compression, it transforms into Compressed Bio-Gas (CBG) with more than 95% pure methane. \
· 2018-SATAT Initiative by the Ministry of Petroleum and Natural Gas to promote CBG as an automotive fuel.
|WATER AND SANITATION:|
Swachh Bharat Mission (SBM: 2014)
- Nodal Agency: Originally, Ministry of Drinking Water & Sanitation (So Now Jal Shakti Ministry).
- While ancient Indus valley civilization accorded prime importance to sanitation by integrating sanitation systems into town planning. But over the ages this domain received less attention of the policy makers. As a result, even in 2012, more than half the Indian population, still practiced open defecation.
- PM Manmohan Govt. launched Nirmal Bharat Abhiyan in 2012
- In 2014, above scheme was restructured as SBM.
- Core Schemee. Not 100% funded by Union (60:40 or 90:10) + Corporates’ CSR funding.
- In 2019, Modi given Global gatekeeper award by the Bill and Melinda Gates foundation for SBM
Target of Swatchhta Diwas (Gandhi’s 150th Birth Anniversary- 2 Oct 2019):
- Open Defecation Free (ODF) India.
- Eradicating manual scavenging
- Improving Municipal Solid Waste Management (MSWM)
Ways to achieve targets:
- Funds given for building toilets in individual homes, community toilets and bathing house, Public toilets at bus station, schools, temporary construction sites
- Additional financial assistance for solid waste management projects- trucks, garbage disposal units etc;
- IEC, Awareness & behavioural changes through Swachhta Doots, Social Media, Campaigns, posters, advertisements.
- Darwaza Band: awareness campaign to ensure villagers don’t defecate in the open.
- Research Development in sanitation.
- SBM assets have been geo-tagged. Many mobile applications have been launched to complaint about unclean areas to municipal corporations.
Implementing agency of the scheme:
- SBM-Rural implemented by Jal Shakti Ministry, Dept of Drinking Water and Sanitation. (Earlier it was “Ministry” of Drinking Water and Sanitation)
- SBM-Urban implemented by Ministry of Housing and Urban Affairs.
Economic surveys on SBM:
- The lack of access to toilet facility led to reduced food & water intake by girls to avoid going during day time – malnutrition and anaemia.
- Open defecation – infections among pregnant women, Maternal mortality ratio, Infant Mortality Rate chances increase.
- Intestinal infection (enteropathy) in children. Even if children given good food their body will not absorb the nutrients fully so poor brain development as result, poor educational outcomes.
- Every household in an open defecation free village saved about ₹ 50,000 per year due to lower chances of disease, time saved due to a closer toilet, Improved economic productivity
- Open defecation and municipal waste eventually contaminate the water bodies- and harm the flora-fauna.
Swatchh Bharat: ES-2019
CEA Subramanian K. suggested that:
- Goa, Odisha, Telangana, Bihar, W. Bengal, Sikkim have not yet achieved 100% Open Defecation Free status as of 2019-June.
- Some rural males still don’t use toilets. Even in urban areas, people keep their homes clean but litter in public places. So, we have to inculcate a behavioral change for maintaining cleanliness at public places as well.
- Recurrent water crisis in india, so we need to adopt eco-friendly water conservation in toilets. e.g. Bio toilets, dual flush toilets.
- Clean India should also be pollution free India, so we should focus:
- Industrial effluent, plastic menace, controlling air pollution etc.
- Bioremediation, river surface cleaning, river front development.
- Afforestation and biodiversity conservation.
- To do the above things, we have to mobilise more funds through: Micro-financing, Concessional Loans, Corporate Social Responsibility, Crowdfunding, Public Private Partnership
- will open Rashtriya Swachhta Kendra at Gandhi Darshan, Rajghat (New Delhi) on 2nd October, 2019.
- Culture Ministry’s autonomous body ‘National Council for Science Museums’ is preparing a Gandhipedia to sensitize people about Gandhian values.
- 150th birth anniversary of Mahatma Gandhi is being celebrated for a period of 2 years from 02.10.2018 to 02.10.2020. National Committee (NC) under the Chairmanship of President of India and Executive Committee (EC) under the Chairmanship of the Prime Minister have been constituted.
All 5.99 lakh villages, 699 districts and 36 States/UTs have declared themselves Open Defecation Free (ODF). Further, ₹12000 Cr allotted.
- SDG- 6: “By 2030, achieve sanitation and hygiene for all, and end open defecation, paying special attention to women, girls and those in vulnerable situations”.
- Sanitation for all ensures social, environmental and economic gains for all.
- Mahatma Gandhi once said, “Sanitation is more important than independence.” Therefore, only a Clean, Health and Beautiful India can be our fitting tribute to Gandhi’s 150th Birth anniversary.
Swachhta Udyami Yojana (2014):
- Ministry of Social Justice gives fund to National Safai Karamcharis Finance and Development Corporation.
- Provision of Concessional loans to Safai Karamcharis and Manual Scavengers for:
- Building community toilets – they can charge user fees.
- Buying Sanitation related Vehicles -Beneficiaries can take contracts from the Municipalities for garbage collection etc. to earn livelihood.
Inland Waterways Transport (IWT) has following benefits:
- Lower CO2 emissions & fuel in transporting per tonne of cargo than Rail or Road.
- IWT requires very little land acquisition than Rail or Road.
- IWT eases traffic congestion on Road or Rail networks.
Inland Waterway Authority of India
IWAI is a Statutory Body under Ministry of Shipping, responsible for the development, management, safety, survey of inland waterways. Its notable portals are:
- FOCAL to connect cargo owners and shippers.
- LADIS – Least Available Depth Information System so shippers can know whether it’s safe to take their vessel further or not.
- According to 7th Schedule, under Union List- Parliament can make laws on inland waterways.
- National Waterways Act, 2016: 5 existing waterways and 100+ additional waterways declared as National Waterways. 5 existing waterways are:
|1. Ganga-Bhagirathi-Hooghly River System (Haldia – Allahabad)
|Uttar Pradesh, Bihar, Jharkhand, West Bengal
|2: Brahmaputra River (Dhubri – Sadiya)
|3: West Coast, Champakara and Udyogmandal Canals
|4: Krishna, Godavari and a few Canals
2890 (when finished)
|Tamil Nadu, Andhra, Telanagana
|5: Mahanadi delta rivers & canals
|Odisha, West Bengal
|Apart from above, NW68: Mandovi (Goa), NW111 Zuari (Goa), NW97: others are presently operational.|
Jal Marg Vikas Project (2014)
NW-1 has low depth upstream of Farakka, difficult to take big vessels.
- This project aims to develop infrastructure, navigational locks to make NW1 enable commercial navigation on Varanasi-Haldia stretch of river Ganga.
- Plus, provisions for Roll-on-Roll-off (Ro-Ro) ferries, Digital dashboard and portals for River Information System (RIS) and Vessel Traffic Management System (VTMS) etc.
- Central Sector Scheme + loans from World Bank (IBRD) + PPP.
- 2018-Nov: Modi inaugurated India’s first multi-modal terminal at Varanasi & welcomed the cargo ship ‘MV Rabindranath Tagore’ coming from Kolkata.
- Entire project will by finished by March 2023 & will help to convert Ganga into ‘Arth Ganga’ (River of wealth).
Varanasi also designated as India’s first ‘freight village’ i.e. an area where national and international cargo operators carry out their activities.
|SHIPPING & PORTS|
India’s long coastline of 7500 km is serviced by 12 major ports, 187 minor ports. Non-major ports are gaining shares and a major chunk of traffic has shifted from major ports to non-major ports. Maritime trade accounts for 90% by volume and 70% for value. Thus the development of ports is vital for our economic sector.
Alang-Sosiya (Gujrat) is the largest ship recycling yard in the world.
Ministry of Shipping consists of:
|· Inland Waterway Authority of India (IWAI)
· Tariff Authority for Major Ports (TAMP) to decide the fees charged by Major ports.
|· Directorate General of Shipping, Mumbai
· DG Lighthouses and Lightships
· Minor Ports Survey Organisation,
|PSU and Statutory corporation
|· Shipping Corporation of India, Mumbai.
· Dredging Corporation of India Limited.
· Kamarajar (Ennore, Tamilandu) Port Limited, Cochin Shipyard Limited, Cochin
· Central Inland Water Transport Corporation Limited
· Hooghly Dock & Port Engineers Limited.
· Sethu – Samundaram Corporation Limited
|· International Maritime Organization (HQ: London, UK) – is a United Nations specialized agency for regulating shipping.
· Hong Kong International Convention (2009) deals with the safe and environmentally sound recycling of ships. 2019: India ratified it.
- . Port traffic in India is set to rise at a CAGR of 29.2 per cent over FY15-17
- CAGR in traffic
- Non-major ports: expected to increase by 140.5 per cent to 815 MMT by 2017 from March 2016
- Major ports: expected to increase by 55.5 per cent to reach 943 MMT by 2017 from FY16 (April-December 2015)
- India has a coastline which is more than 7,517 km long, interspersed with more than 200 ports
- Most cargo ships that sail between East Asia & America, Europe & Africa pass through Indian territorial waters
- India is the largest importer of thermal coal in the world
- Non-major ports are set to benefit from strong growth in India’s external trade
- Special Economic Zones are being developed in close proximity to several ports – comprising coal-based power plants, steel plants & oil refineries
- The government initiated NMDP an initiative to develop the maritime sector, the planned outlay is USD11.8 billion
- FDI of 100 per cent under the automatic route & a 10 year tax holiday for enterprises engaged in ports
- Plans to create port capacity of around 3200 MMT to handle the expected traffic of about 2500 MMT by 2020
Major and Minor Ports:
- Indian Ports Act, 1908: State Governments responsible for 200+ minor ports and Union Government is responsible for 12 Major Ports.
- In 2010, UPA govt. announced to setup Port Blair (Andaman Nicobar) as Major port.
- In 2016, NDA govt. announced to setup Sagar in west Bengal, Duggirajupatnam in Andhra Pradesh, Vadhavan in Maharashtra, Enayam in Tamil Nadu as major ports.
- In feb 2020, Government announced setting up a new major port at Vadhavan in Maharashtra. It will be developed by a Special Purpose Vehicle (SPV) company wherein Jawaharlal Nehru Port Trust (JNPT) will have 50% shareholding.
Dry Ports: They are inland terminal, directly connected to a seaport by rail or road e.g. Patna in Bihar, Hazira in Gujarat. 20+ such dry ports under development (2018).
Major Port Authorities Bill, 2020:
|Major Port Trusts Act, 1963.
|This bill aims to replace it with simpler and more modern framework|
|· All major ports were managed by the respective Board of Port Trusts.
· Central government appointed members
|· For each board, there will be separate Board of Major Port Authority
· Members from the State Government, Railways Ministry, Defence Ministry, Customs Department etc.
|Ports’ user fees/ tariffs were decided by Tariff Authority for Major Ports.||Above boards will set up Committees to determine user fees/ tariffs.|
|Board had to get government’s permission before borrowing any loan.||Central certain technical relaxations given in this regard, so more autonomy will be there.|
Budget-2020: Govt will consider corporatizing at least one major port (converting it into a Public limited company) and subsequently listing its shares on the stock exchanges.
Challenges to Ports in India:
- Problem of heavy silting and inadequate dredging capacities as seen in riverine ports like Haldia.
- Currently the ports operate on Trust model where government is the owner and operator of the port. We need to shift towards Land-lord tenant model where private sector can operate the port.
- While India made great success in metro rails and airport infra, But shipping infrastructure has been neglected. We suffer from ageing fleet, manpower shortage, we do not have world class ports. Third-generation large sized ships are unable to enter our ports so their goods are first offloaded in Sri-Lanka, then sent to India in smaller ships.
- Port congestion, delay in turnaround, takes lot of paperwork to load and unload cargo, customs clearance and inspection is slow, inadequate road and rail connectivity with the hinterland.
- Privately owned minor ports are more efficient, whereas major ports suffer from labour unions and politicization of the Board Of Directors.
- Problems of land acquisition and environmental clearances while setting up new ports.
- Domestic Shipping companies buy or hire foreign ships at higher cost because domestic shipbuilding industry is underdeveloped. (Although shipping ‘breaking’ industry is well developed at Alang in Gujarat.)
- Non-perennial rivers and requirement of constant dredging poses challenges.
ES20: logistics Challenge in India
CEA Subramanian K. provided a case study:
If an apparel factory in Delhi has to export clothes to USA through India’s largest port in Maharashtra i.e. Jawaharlal Nehru Port Trust (JNPT) also known as ‘Nhava Sheva Port’, it will take more than 40 days.
Similarly, ES20 gave case studies of Electronics export, carpet import etc. and found:
- Loading, unloading, customs inspection processes at Indian airports is vastly superior to its seaports.
- Ironically, customs clearance processes for imports are better/faster than those for exports. (whereas the Government should focus on making it ‘easier’ to export for improving our CAD & BoP)
Ways to make Indian ports more efficient and competitive:
- It is important that the Indian shipping industry be provided a level playing field for it to grow and compete globally. This will require rationalisation of restrictive policies, particularly related to imposition of a variety of direct/indirect taxes.
- Having an integrated approach to port development i.e. multi- modal port development. Adequate rail and road connectivity must be provided to these coastal terminals.
- Switching to landlord-tenant Model, where operation is in the hands private player. Govt has initiated the major port authorities bill, 2016 to enact a more friendly land-lord tenant model.
- Efforts should be made to develop deeper stretches of the rivers for IWT/navigational purposes for round-the-year navigation
- Priority should be accorded to coastal ships by setting up coastal terminals at the major ports and identifying and developing five or six non-major ports on the east and west coasts as designated coastal ports.
- Building and maintaining infrastructure for handling desired capacities. Ensure mechanisation of ports through introduction of new equipment and procedures, built new facilities and upgrade existing ones.
Port Logistics: Authorised Economic Operator (AEO):
- An importer, exporter, cargo company can apply to the Central Board of Indirect Taxes and Customs (CBIC) to get this ‘status’. Subject to conditions like:
- Minimum 3 years’ experience
- Never filed bankruptcy
- Never caught in fraud / smuggling etc.
- Benefits: Faster clearance times, fewer physical examinations on cargo etc.
- At International level, World Customs Organization (WCO, HQ: Brussels, Belgium)’s “SAFE Framework” guides this program.
|· World Bank’s Logistics Performance Index, released every 2 Years
· 2018’s Ranking: Germany (1) > Sweden > Belgium > Austria > Japan >…. India (44)
|· Commerce Ministry’s Logistics Ease Across Different States (LEADS) index
· 2019 Ranking: Gujarat > Punjab > Andhra > …Himachal (last)
- In 2003, PM Vajpayee proposed Project Sagarmala
- NDA Govt. revived idea in 2015.
- Nodal Agency: Shipping ministry.
- Scheme is Central Sector Scheme.
- Sagarmala aims to develop new major & minor ports, improve existing ports, encourage coastal shipping.
- Although in practice it is Sagarmala Development Company Limited (2016) invest in Special Purpose Vehicles (SPVs) companies (in which State & private players may also have shareholding).
- This SPVs implement various projects under Sagarmala.
- Costal Economic Zones (CEZs) to create manufacturing & employment opportunities. Give them Hinterland connectivity through rail, road, inland water transport.
- Skill development, training for coastal community.
Significance of the vision:
- Now, Indian ocean bears two-thirds of the world’s oil shipments, one third of its bulk cargo and half of its container traffic. Over three fourths of its traffic goes to other regions of the world.
- India is also emerging as a new hub of manufacturing, which needs well developed ports. It also has an important role in making the Make in India project a success and greater global engagement and integration with its trading partners.
- Waterways are environmentally friendly when compared with other means of transport.
- Expansion of bilateral and multilateral naval exercises with many of India’s neighbours in the Indian ocean. For maritime capacity building, especially in the island states that occupy critical locations in the Indian ocean.
- In the light of increasing marine piracy and terrorist attacks from sea frontiers (2008 Mumbai attacks).
- Increasing share of maritime trade in overall trade basket containing trade through land, air and maritime routes.
- IO coastline is vital in providing livelihood security to fishermen community in India.
- IO region is well endowed with resources in Exclusive Economic Zones (EEZ) which are important for energy exploration and resources.
Sethusamudram project (1997): to create a shipping canal between Palk bay & Gulf of Manner to reduce time & fuel consumption. But case pending in SC-PIL that it’ll hurt marine biodiversity & Ram Sethu’s religious sentiments.
Multi-Modal Transportation of Goods Bill, 2019
- Multimodal transportation implies using a combination of more than one mode of movement, such as rail, road, sea for transportation of goods.
- Original act of 1993 contained provisions for:
- Registration of such cargo company
- Their liability in case of cargo delay / damage.
- In 2019, Government planning to replace this old act, with a new act.
- National Highways, which are the responsibility of the Central Government, account for around 2 percent of the total road network in India. National Highways carry around 40% of the total traffic across the length and breadth of the country. Increased industrial activities, along with increasing number of two and four wheelers have supported the growth in the road transport infrastructure projects.
- The government’s policy to increase private sector participation has proved to be a boon for the infrastructure industry. Also, the Government has permitted 100 per cent foreign direct investment (FDI) in the road sector. Recently, the Government has launched Bharatmala Pariyojana which is expected to provide NH linkage to 550 districts, and be a major driver for economic growth in the country.
Min. of Road Transport & Highways:
|Statutory Bodies||National Highways Authority of India (NHAI)|
|National Highways and Infrastructure Development Corporation|
|Since 2019, Government allowed “LA” number plate mark for vehicles registered in UT of Ladakh. (Lakshadweep: “LD” plates)|
|· Vahan Portal: vehicle registration, taxation, permit, fitness and associated services across the country.
· Sarathi Portal: driving license, learner licence, driving schools and related activities.
Types Of Road:
|National Highways||Union Government||State capitals, major cities, ports|
|State Highways||State Government||State Capital to District HQ|
|District Roads||Zila Parishad||District HQ to tehsil and Blocks|
|Village Roads||Gram Panchayat||Villages to neighboring towns|
|Expressway||PPP / SPV (usually under aegis for NHAI)||Six to eight lane high class highways e.g. A’bad Vadodara Expressway made by SPV owned by NHAI+ IRB Infrastructure Developers.|
Organizations associated with highway construction:
- National highways authority of India (NHAI),
- State Public Works Department (PWD),
- Border Roads Organization (under Defense Ministry)
In terms of total road length (bigger to smaller): Other roads >> State highways >> National highways >> expressways
National Highways Authority of India is a statutory body under Road Ministry. It gets Funds from:
- Road and Infrastructure cess on Petrol & Diesel- Central Road and Infrastructure Fund (setup in 2000, Non-Lapsable).
- External Assistance from World Bank, ADB; Market Borrowings by NHAI, Public Private Partnership (PPP).
- In 2019, Government allowed NHAI to setup Infrastructure Investment Trust (InVITs) with approval of SEBI.
- GATI Portal (2020) by NHAI to monitor the progress of Highway construction in India. Contractors can raise complaints through this portal (e.g. Government engineer demanding bribes, not clearing files on time etc.)
PM Vajpayee started National Highways Development Programme (NHDP) to build:
- Golden Quadrilateral connecting the four metro cities of Delhi, Mumbai, Chennai and Kolkata
- North-South corridor to connect Srinagar to Kanyakumari.
- East-West corridors to connect Silchar to Porbandar.
Budget-2014: Diamond quadrilateral proposed to connect major metros through High Speed Railways.
The progress under NHDP has been somewhat slower than anticipated:
- Timeliness in awarding contracts.
- Difficulties in acquiring land.
- Securing environmental clearances.
- Shortages in construction capacity.
- In a 2012 Report, the World Bank alleged the presence of fraudulent and corrupt practices by Indian contractors. Road safety is also a major issue.
- Further optimization of energy and transport under NHDP is achievable with the accelerated construction of service lanes for local traffic in all existing four-lane and six-lane roads. Financing of these roads should rely on user charge principle in form of tolls and continuing with the existing Central Road Fund through additional levies on petrol and diesel.
Pradhan Mantri Gram Sadak Yojana (2000)
- Nodal Agency: Rural Development Ministry.
- Centrally Sponsored Scheme: Core Scheme so not fully funded by Union. (General-60:40, Sp. Cat-90:10)
- In 2000, PM Vajpayee govt. launched to construct all-weather single (lane) roads for all unconnected rural habitations:
- Upto min. 500 population (plains) by 2019
- 250 or above (Sp. Cat States, tribal districts and desert areas) by 2019
- 100-249 population (if Naxal or Left Wing Extremism affected areas) by 2020
- PMGSY – II (2013 onwards): To upgrade / repair the previously constructed rural roads and to construct new roads.
- PMGSY Phase-III (2019-20 to 2024-25): To upgrade 1,25,000 kms of road in the next five years. In this phase, we’ll also construct road bridges upto 150 m in plain areas and 200 m in Himalayan and NE States.
- To reduce carbon footprint, PMGSY roads are built using Green Technology, Waste Plastic and Cold Mix Technology.
Bharatmala Pariyojana (2017):
- Nodal Agency: NHAI (Ministry of Road Transport & Highways).
- It aims to upgrade & expand the highways that were built under the previous NHDP.
- It has 7 phases. Phase-1 aims to upgrade 24,800 kms of national highways by 2022.
- Special focus on connecting the coastal areas, economic corridors, and border regions (for easier troop movement against China-Pak & increase land based export-import with Nepal, Bhutan, Bangladesh and Myanmar).
- Nodal Agency: Road Ministry.
- Central Sector Scheme i.e. 100% funded by Union.
- Setu Bharatam aims to make all National Highways free of railway level crossings by by constructing Railway Over Bridges (ROB)/Railway Under Bridges (RUB).
- Mandated timeline: 2019.
- Less traffic condition & accidents in highways
- Less employees required for manning the railway crossing signals.
Char Dham Mahamarg Vikas Pariyojana:
- Nodal Agency: Road Ministry
- Project aims to build and renovate roads to connect four prominent Dhams in Uttarakhand viz. Gangotri, Yamunotri, Kedarnath and Badrinath.
Electric Vehicle (EV)
- Electric vehicle is an automobile that is propelled by the energy stored in rechargeable batteries. Such vehicles are further classified into:
- Battery Electric Vehicles (BEVs) and
- Hybrid Electric Vehicles (HEVs) which can run on both battery (using electric motor) and petrol/diesel (using internal combustion engine).
- In India, transport sector is the second largest contributor to CO2 emissions after the industrial sector. Electric vehicle can help reducing it.
- Shift to EV will result into:
- Less import of crude oil import so less CAD
- India can emerge as a hub for manufacturing for EVs.
- This can provide employment opportunities and earning of foreign exchange through exports.
ES2020: Currently, the market share of electric cars is less than 1% in India, compared to compared to 2% in China and nearly 40% in Norway.
Steps taken to promote EVs in India:
- 100 % FDI through automatic route is permitted in the automobile sector.
- 2013: National Electric Mobility Mission Plan 2020 (NEMMP) for promoting electric and hybrid vehicles.
- 2015: Ministry of Heavy Industries & Public Enterprises launched Faster Adoption and Manufacturing of Electric vehicles (FAME) scheme to fast-track the goals of NEMMP.
- 2019: FAME India Phase II has been launched from April 2019 for a period of three years with funding of INR10,000 crores. It will setup 2700 charging stations in major cities in such manner that
- at least one charging station is available in a grid of 3 km x 3 km in cities.
- At least one charging station is available every 25 km on highways.
- It will also focus on electrification of public transportation.
- GST on EVs is reduced to 5% from the current rate of 12%.
- Budget-2019: Additional income tax deduction on loans taken to buy EV.
- Ministry of Road Transport Highways (MoRTH) notified Green Number plate for the use of Electric Vehicles.
NITI vs Highway Ministry differences w.r.t 100% EV Adoption:
- In 2017, NITI proposes at least 40% private transportation should be electric by 2030.
- In Jun 2019, NITI proposed only electric vehicles should be sold after 2030. However, automobile makers have heavily criticized this move.
- In Aug 2019, Union Minister of Road Transport and Highway cleared the air that
- There will be no ban on petrol and diesel vehicles in the country.
- Government has not set any deadline for automakers to switch to electric vehicles.
- I am the minister, NITI Aayog does not have the authority to set Electric Vehicle deadline.
ES19: EVs Charging is the biggest challenge:
- Norway has the highest share of electric cars in its private transport. Because they provide tax incentives to EV buyers, waiver of toll fees, free parking, etc. However, the Latest Economic Survey observed that more than such tax incentives, need of the hour is to develop charging station infrastructure in India because:
- EV batteries’ primary components is Lithium. China has secured a supply of this metals from Congo, Bolivia, Chile and Australia. China controls half the cobalt mines in Congo. India also has to expand to such upstream areas to secure Lithium supply.
- EV batteries have limited driving range. So, charging stations must be available throughout the road networks. Else, people will prefer Internal Combustion Engines (ICE) vehicles like petrol-diesel cars.
- Depending on the technology of charging stations, it can take from 30 minutes to 8 hours to recharge the battery. Therefore, universal charging standards are required in India.
- Government should also inform users about the availability of charging stations in their vicinity with the help of physical science, GPS maps / Apps.
- India’s climate is much hotter than Norway. High temperature degrades battery life cycle. We needs to encourage R&D accordingly. Otherwise, frequent battery replacement costs will discourage potential buyers.
Electric vehicles represent the next generation in sustainable mobility. India must emphasize on them to reduce its GHG emissions, and to provide new avenues for employment and export earnings. Aforementioned initiatives / reforms are important in this regard/need to be addressed on priority basis.
Bharat Stage Norms and Fossil Fuel Emission:
- Central Pollution Control Board (CPCB) (Statutory Body under Environment Ministry) has instituted Bharat Stage emission norms (BS) norms .
- Higher the standard number means stricter the norms and more expensive for automakers to design such types of engines.
|BS IV||· April 2017: compliant vehicles made compulsory.
· April 2020: SC banned their sale from this date.
|BSV||Skipped by Govt.|
|BSVI||Only this type of vehicles can be sold from 1 April 2020 onwards Stage-VI vehicles will emit less Sulphur and Nitrogen Oxides than their predecessors.|
- Many buyers awaiting new BS6 cars’ prices to fall instead of buying BS4 models.
- Even though the BS4 car may be cheaper, it’ll not have good re-sale value in the 2nd-hand used market after 5-6 years. So buyers are hesitant.
- Among others, above reasons contributed to decrease in automobile sales in 2019
- Separately, Department of Heavy Industry notified Corporate Average Fuel Efficiency (CAFE) norms for passenger cars, requiring them to cut down CO2 emission from 2017 onwards.
Motor Vehicle Amendment Act 2019
- Road accidents takes more than 1.5 lakh lives every year. So, Union’s Motor Vehicles Act, 1988 was amended in 2019 with severe penalties – such as Drunk-driving fine increased from INR 2,000 to INR 10,000 etc. Even road contractors and officials can be punished with fine if faulty infrastructure results in accidents.
- Concurrent List Entry 35: Mechanically propelled vehicles. So, both union and states can enact laws but Union’s law will prevail.
- But, some State Governments have notified reduced penalties. Union Highway Minister said, “States can revise fines if they want. However, peoples’ lives should be saved.”
Further, Motor Vehicle (Amendment) Act 2019 mandates:
- Aadhar card compulsory for getting a driving licence and vehicle registration.
- Good Samaritan – who helps the injured victim in good faith – will not be harassed in civil /criminal cases. It will not be mandatory for them to disclose identity to police or doctors.
- Road builder can be penalized if poor quality of road leads to accident.
- Vehicle company can be penalized for sub-standard components. Government can order recall of such faulty vehicles.
- Easier registration process of vehicles modified for Divyang(PH)
- A Motor Vehicle Accident Fund will provide compulsory insurance cover to all road users in India for certain types of accidents.
- Technical reforms in third party motor-vehicle insurance & claims.
|IBMS||Road Ministry developed an Indian Bridge Management System (IBMS) web-portal to monitor 50,000+ bridges on National Highways of India. Such database can help:
1) Repair works
2) Mega-sized trucks could be diverted to other routes to avoid structural damage to small bridges.
|The longest Rail-cum-Road Bridge of the India (4.94 km).
Connects Assam’s two districts over Brahmaputra river. 2018: Modi inaugurated.
|Dhola- Sadiya Bridge
|Longest road bridge of India (9.15kms) to connect Dhola in Assam to Sadiya in Arunachal over river Lohit, a tributary of River Brahmaputra. 2017: Modi inaugurated.|
|Dhubri- Phulbari Bridge
|19.3 kms road bridge to connect Dhubri (Assam) and Phulbari (Meghalaya) over river Brahmaputra. 2019: Modi approved, will finish by 2026-27, then it’ll become longest bridge.|
|Built over Diffo River in Arunachal Pradesh.|
|Road Ministry → extra funds for roads in North East. Special Accelerated Road Development Programme (SARDP-NE)|
|Kartarpur Sahib Corridor (2019)
|· Kartarpur Sahib is located on the bank of Ravi river, Pakistan, about 4.5 km from the international border.
· Here Guru Nanak Sahib spent his 18 years until his death in 1539.
· 550th birth anniversary of Guru Nanak Sahib in 2019.
· Govt launched Visa-free corridor – Indian citizens and OCI (Overseas Citizens of India) can travel from India to Pakistan.
|· To connect Haldia/Kolkata Port à Sittwe Port (Myanmar) à Kaladan River à Road transport to Mizoram.
· In other words, this project aims to provide alternate connectivity between eastern ports of India to Mizoram via Myanmar.
|IMT||· India-Myanmar-Thailand Trilateral Highway.|
|· Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Agreement (MVA) to enable movement of passenger and cargo vehicles across borders. While Bangladesh, India and Nepal have implemented it but Bhutan’s Parliament yet to pass the bill of 2019-April.|
|· International North–South Transport Corridor
· Members: India, Iran, Russia, Turkey, Azerbaijan, Kazakhstan, Armenia, Belarus, Tajikistan, Kyrgyzstan, Oman, Ukraine, Syria. Observer member – Bulgaria. (It helps connecting Afghanistan through Chabahar port although directly it may not be passing through it.)
· With ship, rail, and road route for faster cargo transport.
|Ashgabat agreement (2011)
|· Ashgabat Agreement For multimodal goods transport between Central Asia and the Persian Gulf.
· Signatories: Kazakhstan, Uzbekistan, Turkmenistan, Iran, Oman, Pakistan (2016), India (2018). This also creates synergy for INTC.
|Blue Dot Network (2019)
|· Proposed by the USA, Japan and Australia. India is yet to join.
· If an infrastructure project gets ‘Blue Dot’ Certification, then that Project has high standards of quality, transparency, sustainability, and developmental impact.
· This will encourage private investors from 1st world nations to invest in such projects.
|Chabahar & Gwadar||· Chabahar Port in Iran. India helped building it.
· Gwadar Port in Pakistan. So obviously China helped building it.
Recommendations of Rakesh Mohan Committee:
- Roads should not be looked at in isolation, but as part of an integrated multi-modal system of transport. The planning and development of the primary road network must tie up with planning of railways’ dedicated freight corridors.
- The existing network of National Highways and State Highways may be expanded in tune with the economic growth and development of industrial hubs, SEZs, ports, tourist centers and connectivity to international routes – Asian Highways and the European Road Network.
- Special needs of connectivity to ports, airports, mining areas and development of power plants should be factored in development of the road programme.
- States should encourage citizen and user oversight through undertaking road user satisfaction surveys.
- The current program of PMGSY should be expanded to achieve universal connectivity to all habitations on time bound basis.
- Expand the reach of the electronic toll collection (ETC) system. Complete the setup of ‘FASTag’, which employs radio- frequency identification.
- There is need for continuous upgradation of technology in the auto industry, especially the commercial vehicle sector, to meet the objectives of better comfort, productivity, energy efficiency.
- Private sector financing in the highways will remain confined to commercially viable and high traffic density stretches. It will be prudent to enhance the availability of public sector funding.
- For capacity augmentation of state highways every state should formulate and implement programmes on the lines of NHDP.
Good connectivity is a fundamental requirement equitable industrial growth in all regions. SDG Goal-9 requires India to build resilient infrastructure including all weather roads connecting all villages.
- First railway from Mumbai to Thane (34 kms). Governor General Dalhousie in 1853.
- In 1921, Acworth Committee recommends separation of rail budget from General budget; practice started from 1924-25, ended in 2017 by Govt.
- Today, Indian railways has the fourth largest in terms of network (more than 65,000 route-km) after the US, China and Russia.
Ministry of Railways consists of:
|Zonal – Headquarter||· 17th zone is Metro Railway Zone Kolkata (proposed)
· 18th Zone is: South Coast Railway – Vishakhapatnam (Andhra)
|Subordinate – Offices||· Railway Recruitment Boards.
Railway Staff College, Vadodara, Guj· Indian Railway Engineering Institute, Pune.
|· Railway Board, under the Indian Railway Board Act, 1905|
|· IRCON (Construction), IRFC (Finance), IRCTC (Catering Tourism),
· Konkan Railway Corporation Ltd., Mumbai Rail Vikas Corporation,
· Dedicated Freight Corridor Corp. of India Ltd.,
· Bharat Wagon and Engineering Co. Ltd., Burn Standard Coy. Ltd, Braithwaite and Company Ltd.
· Container Corporation of India Ltd. (CONCOR)
- Congested networks.
- Organisational structure: Delays in decision- making, inadequate market orientation and long project approval durations lead to slow turnover times.
- Internal generation of resources: Negligible non-fare revenues and high freight tariffs have led to a sub-optimal freight share. The lower relative cost of transporting freight by road has led to a decline in the share of the railways.
- Safety and poor quality of service delivery: There have been a number of accidents and safety issues in the IR in recent years.
Cross Subsidization in Railways:
- To keep rail travel cheap for the poor people, Railways keeps the passenger tickets lower than its input cost.
- To compensate this loss, Railways keeps freight (goods transport) prices higher. This is called “Cross subsidization”
Operating Ratio of Railway:
- Operating Ratio means Railways operating expenses divided by its operating revenues.
- 2018: 96.2%
- Budget-2019: aimed to improve it to 95%
- Cross subsidization, poor operating ratio, poor sanitation, dismal service quality & safety compromised.
- Railways ill-equipped to combat robberies, vandalism, stone-pelting.
- While truck transport-more pollution, expensive and slow than trains, yet more than 2/3rd cargo carried by trucks.
Railways Modernization: Personnel & Organizational Reforms –
- Earlier, Sam Pitroda Committee (2012) and Bibek Debroy Committee (2015) and many others had suggested various organizational reforms for the Railways.
- PM Modi Cabinet had constituted Alternate Mechanism and approved following:
- Unification of Services
- Restructuring of Railway Board.
Reforms in Unification of Services:
recruited through Indian Engineering Service (IES) exam of UPSC viz.
1. Indian Railway Service of Engineers
2. Signal Engineers
3. Mechanical Engineers
4. Electrical Engineers
5. Stores Services
6. Non-Technical services recruited through Civil Services Exam (CSE) of UPSC viz.
1. Indian Railway Traffic Service (IRTS)
2. Indian Railway Accounts Service (IRAS)
3. Indian Railway Personnel Service (IRPS)
This resulted in fragmented manpower planning, lack of coordination with each other, departmental rivalries.
|· These eight services will be merged
into Indian Railways Management Service (IRMS)· Benefit – Improved coordination and efficiency.
|Indian Railway Medical Service (IRMS), recruited through Combined Medical Services Examination of UPSC||It will be renamed as Indian Railway Health Service
Issues with Unification of Services:
- Officers fear their seniority / promotion may be affected with merger.
- Electrical / mechanical engineering works can’t be manned by non-Engineers because they don’t have subject knowledge. Therefore merger into a single service is irrational.
- Bibek Debroy Committee (2015) suggested merger of these services into two services:
- Technical and
- That would have been more rational decision.
Railway Board Restructuring:
|Railway Board, the apex decision making body of Railways had:
· One Chairman
· Members selected from various Railway departments.
|Similar to a Company board.
· Chairman of the Railway board will be the Chief Executive Officer (CEO)
· 4 functional Members i.e. officers from Railways selected on merit cum seniority basis.
· Some independent members with knowledge & experience in industry, finance, economics and management fields.
|Railway board members were allocated subjects on functional lines, similar to a company board:
2. Business Development
3. Human Resources
Private Train Operators:
|· Indian Railways itself responsible for running the trains, collecting ticket- fees, delivering passengers and goods.
· Affluent passengers prefer Airlines over Railways because they are faster, cleaner & safer.
|On selected routes (not all routes):
· Private train operators will buy their design/buy their own private trains from anywhere in the world. They will run it on Indian tracks with their own driver, staff, & charge market- linked fares.
· Government (Indian Railways) provide timetable, track and signalling infra to them.
· Private train operator will share % of its revenue with Government.
|· Passengers will benefit from world-class train services e.g. No nuisance of hawkers, beggars, unhygienic toilets.
· Lady train hostesses to deliver food & amenities.
· Such trains will stop at very few stations, will have minimum 160 kmph speed will assure faster and more pleasant journey.
|· Lately, Government itself started ‘premium trains’ such as Duronto, Tejas, Vande Bharat, Uday, Hum- Safar etc.
· But there is a long waitlist for tickets. Which proves people are willing to pay for good service, but Govt alone doesn’t have enough funds to launch many such ‘premium trains’
- In 2006, Ministry of Railways allowed private operators to run container trains on the Indian Railways (IR) network.
- Railways constituted Amitabh Kant Panel for entry of private operators in passenger trains.
- First ‘Private’ train (2019): Lucknow-Delhi Tejas Express launched. It’s operated by IRCTC. Although, IRCTC is a subsidiary company of the Ministry of Railways. So, technically, it’s not ‘fully private train’ but if this experiment is successful, then actual private operators may be allowed.
- In Jan 2020, Indian Railways has invited private companies to apply for running 150 passenger trains on 100 routes.
Draft proposal is as following:
|Private player will Design, Build, Finance and Operate (DBFO) his private trains on the routes given to him. Train must have minimum 16 coaches.|
|35 Years. After that, the government may renew or Government itself may start operating it or select another party depending on the mutually agreed conditions in the contract.|
|Fees||private train operator will share a % of his revenue with the Government.|
Challenges in allowing private trains:
- Apprehension among railway employees about job-loss, if Government reduces number of Government trains.
- Coordination issue between private crew running the train and railways Government officials operating the track & signal system.
- Fixing responsibility and insurance claims during train accidents.
- To keep their operational costs low, Private airlines not doing regular service- maintenance of aircrafts- which endangers passenger security. Similar danger in private railways.
- In the aviation sector, Jet Airways et al engaged in Predatory Pricing (selling tickets at deep discount) to kill rival companies. Eventually all suffering from losses. So, fair competition & price regulatory mechanism required.
- If private player imports railway from foreign country, its repair parts or mechanic may not be easily available in India.
- Entry of private train operators will bring greater investment, innovation, employment and pleasant travelling experience for the passengers.
- So, the Government has taken an appreciative step, provided the aforementioned challenges are kept in check.
Railways Modernization Attempts:
|Project uni- gauge Started in 90s
|· Track gauge is the spacing of the rails on a railway track. Broad (1,676mm) à Meter (1,000mm) à Narrow (762 mm, 610mm).
· Project Unigauge to convert selected routes into broad gauge.
· Presently, in terms of track length: Broad > Meter > Narrow.
|Project Saksham 2018
|Skill and Training program for railway employees. Phase-II started in 2019.|
|Yatri Mitra Sewa
|Wheelchair cum porter services for PH passengers (2016)|
Railways Fares and Rail Development Authority:
- In 2017, Government setup “Rail Development Authority” – non-Constitutional, non-statutory body via cabinet resolution.
- It’s headed by a chairman + 3 members; 5 years term.
- RDA will Suggest Tariff (fares) determination, efficiency and performance standards, customer satisfaction, technological upgrades..
- Although it can only ‘suggest’ because under Railway Act, only the Railway Board can decide on the fares of rail services.
|For booking the tickets in hurry / emergency.|
|Flexi-Fare or Dynamic pricing
|· In 2016 Government introduced this system on premium trains such as Rajdhani, Shatabdi and Duronto trains.
· Here, base fare will keep increasing by “specified” % with every 10% of seats booked.
· Consequently, sometimes train tickets became more expensive than airplane tickets!
· Since 2018, Government gradually stopping this system.
Biotoilets with help DRDO: They contain anaerobic microbial bacteria to decompose and convert human excreta into water and gasses.
“Green corridors in Railways” = on these routes all trains have bio-toilets to avoid direct discharge of human excreta on Railway tracks/station premises.
Rail-Modernization and Electric Traction:
- It means replacing diesel and coal powered engines with electric engines because they are more environmental friendly and energy efficient.
- Earlier, PM Modi & NITI Member Bibek Debroy raised doubts from strategic & economic angles that:
- It will cost around 1 lakh crores, while our existing investment in diesel engines will go to waste.
- Difficult to accomplish in J&K & NE due to topography.
- EU, China, Russia use electric trains for passengers and diesel for cargo transport.
- In 2018, Committee on Economic Affairs (CCEA) approved 100% Electric Traction by March 2022.
Rail-Modernization and Safety:
- 182 toll-free Helpline number
- Rashtriya Rail Sanraksha Kosh (2017) created to finance the projects related to railway safety e.g.Train Collision Avoidance System.
- Budget-2019: Govt. have removed all Unmanned railway crossing in January 2019.
- Budget-2020: Rate of occurrence of rail accidents has steadily decreasing from 2016 to 2019.
- RPGRAMs (Railway Passenger Grievance Redressal and Management System) web- portal and Rail Madad App have been launched
Rail Drishti Web dashboard: provides statistical info related to railway operations.
Rail Safety: Railways Protection Force (RPF) initiatives-2019
- Commando for Railway Security (CORAS) battalion created by Railway Protection Force (RPF), they will be responsible for fighting terrorism and naxalism in Railways.
- Operation Thirst: RPF to crack down selling of unauthorised Packaged Drinking Water in railways.
- Metro Rail is a Mass Rapid Transport System (MRTS) for daily commuters. It runs on electricity & usually confined within a given city.
- At present, India has operational metro rails at Delhi, Mumbai, Kolkata, Chennai
- City Roads are very congested, slow, accident prone, air pollution. While metro rails provide relief in daily commuting.
- However, metro trains are not panacea for India because they are more capital and technology intensive than ordinary public bus or local railways. They require dedicated tracks, underground tunnels and bridges. So there will be problems in land acquisition and remodelling of existing urban road infrastructure.
- Since metro rails cater urban middle class commuters, so, fares can’t be raised beyond a point for faster recovery. So it takes a very long time to recover investment.
Metro Rail Policy 2017:
- Nodal Agency: Ministry of Housing and Urban Affairs (MoHUA).
- Considering aforementioned challenges, Metro train should be launched only after cost: benefit compared to launching more buses and ordinary trains.
- State Government will be responsible for Land acquisition.
- Proposed Investment models for Metro rails:
- 50:50 joint venture between Union & State Or
- Public Private Partnership between State & private company; while Union gives them grants through Viability Gap Fund.
More metro railway initiatives via PPP. Because, modernizing Indian Railway requires total INR 50 lakh crore from 2019 – 2030, but in annual budgets we can barely allot about INR1.6 lakh crore per year, so public partnership necessary.
Bibek Debroy Committee recommendations:
- Streamline recruitment & HR processes. There is a multiplicity of different channels through which people enter the railway services
- Transition to commercial accounting.
- Establishment of Independent Regulator
- Private entry into running both freight and passenger trains in competition with Indian Railways should be allowed
- Constructing new suburban lines should be undertaken as joint ventures with state governments. There are too many Zones and Divisions and thus a rationalization exercise is required.
- Decentralisation should happen at the bottom level duties.
- Non-core areas.
- An Investment Advisory Committee may be set up, consisting of experts, investment bankers and representatives of SEBI, RBI, IDFC and other institutions for raising resources for investment.
In the last decade, the Civil Aviation sector has grown at a phenomenal pace. By 2020, India will be 3rd largest aviation market.
Ministry of Civil Aviation:
|Directorate General of Civil Aviation (DGCA): registers civil aircrafts, gives license to pilots, supervises gliding clubs, implements Chicago Convention on International Civil Aviation.|
|· Airports Authority of India (AAI, Act 1994): Statutory body responsible for creating, upgrading, maintaining airports & runaways in India. It operates 130+ airports in India- some directly, some via PPP basis e.g. GMR group for Delhi and Mumbai airports.
· Airports Economic Regulatory Authority (Act 2008): Statutory regulator setup with powers regulate fees/tariffs charged at airports. Govt introduced new bill in 2019 to increase its powers through some technical reforms.
· Rajiv Gandhi National Aviation University
· Commission of Railway Safety (CRS) is under Administrative control of Aviation Ministry.
|1. Air India & its subsidiaries.
2. Pawan Hans (Helicopter) ltd. Government planning to sell-off both 1&2 through strategic disinvestment.
3. Hotel Corporation of India Ltd.
|Bureau of Civil Aviation Security, Indira Gandhi Rashtriya Uran Akademi|
Civil Aviation Policy 2016:
- More airports and flights for North East & small towns to improve regional connectivity.
- Making the air travel more affordable for middle class
- Improving Airplanes’ Maintenance, Repair and Overhaul (MRO) operations.
UDAN (Ude Desk ka Aam Naagrik) : RCS
- Nodal Agency: Civil Aviation ministry (2017).
- Earlier, Airlines avoided small towns, fearing that not enough passengers will come.
- So, under Ude Desk ka Aam Naagrik– Regional Connectivity Scheme (RCS), Govt. fixed INR 2,500 airfare per seat for one-hour travel on selected regional / small town routes.
- Airlines fly at this rate, small town passengers will come because it will affordable, and if airline making any losses on such route then, they will be covered by Union’s Viability Gap Funding (VGF) and States also contribute 10-20% money depending on whether NE or Non-NE.
- Govt arranges VGF money by charging about INR 5000 levy per flight on airlines operating at major cities (E.g. Mumbai Bengaluru, A’bad-Delhi).
- In 2018, “International UDAN” launched to connect India’s smaller cities directly to some key foreign destinations in the neighbourhood.
Udan 3.0 (2018)
Civil Aviation Ministry invited the airline operators to bid for new regional routes connecting:
- Additional tourist cities & North East cities.
- Seaplanes using Water Aerodromes (e.g. Statue of Unity-Sardar Sarovar Dam in Gujarat, Sabarmati River Front)
NABH Nirman: To Build More Airports
- Budget 2018 announced ‘NextGen Airports for BHarat’ Nirman
- It aims to build 100 new airports in 15 years at the cost of INR 4 lakh crore (mostly through PPP investment.)
- It also aims to expand and upgrade existing airports which will result into billion trips a year.
No Frills airports
AAI develops No Frills airports at small towns and North East with only basic safety and security features. No fancy lounges with air-conditioners, no aerobridges, no conveyor belts for luggage. It is just a single storey building without any posh facility so the low operational costs.
Challenges to aviation sector:
- ATF-Taxes: Airlines spend about 50% of the revenues on Aviation Turbine Fuel (ATF). India’s ATF excise & VAT are among the highest in world so it impacts profitability of airlines.
- Predatory Pricing: It means deliberately selling product below the cost price, to eliminate rival companies. AirDeccan, Spicejet etc. accused of this. It is bad practice for economy because in long term, either the firm will collapse or it will establish monopoly by eliminating rivals.
- Passenger Safety Compromised: Due to higher operating costs, Indian Airlines not doing the regular service & maintenance of the aircraft.
- owned Air India is making losses, in 2018, Union tried to sell its 76% shares to privatize Air India, but no one came to buy.
- Even Jet-Airways, a pvt. sector airline, shut down (2019) due to heavy losses.
- Nodal Agency: Civil Aviation ministry designed the rules effective from Dec 2018.
- India’s airspace classified into:
- Red Zone (flying not permitted),
- Yellow Zone (controlled airspace),
- Green Zone (automatic permission).
- Drone-User will have to do one-time-registration with Digital Sky Platform app.
- Then for every flight, Drone user must ask permission from mobile app. Based on the zone & GPS location its system will automatically permit / deny.
- Any drone without a digital permit will not be able to take-off. Thus, it has “no permission, no take-off” (NPNT) mechanism.
- In 2019-Sept, Iran-backed Yemenis Houthi rebels used drone to destroy oil refineries in Abqaiq, Saudi Arabia.
- In 2019-Dec, USA used drone to kill Iran’s military commander Gen. Qassem Soleimani. So, now Government of India planning to tighten the drone regulations further.
Tourism contributes to over 1.60 lakh crore rupees in Foreign exchange earnings & provides employments to thousands of people.
World Economic Forum’s Travel & Tourism Competitive Index: India’s rank improved from 64 (2014) To 34 (2019)
PRASAD & HRIDAY Mission:
Both are Central Sector Schemes i.e. 100% funded by Union. Both aim to improve the city infrastructure & amenities with special focus on improving the tourism.
|PRASAD (2014-15)||· Pilgrimage Rejuvenation & Spiritual Augmentation Drive.
· Ministry of Tourism, initially 12 cities but then list keeps getting expanded to 20+.
|HRIDAY (2014-15)||· National Heritage City Development and Augmentation Yojana.
· Ministry of Urban Development, 12 cities: Ajmer (Rajasthan), Amaravati (Andhra Pradesh), Amritsar (Punjab), Badami (Karnataka), Dwaraka (Gujarat), Gaya (Bihar), Kanchipuram (Tamil Nadu), Mathura (UP), Puri (Odisha), Varanasi (Uttar Pradesh), Velankanni (Tamil Nadu), Warangal (Telangana).
- In 2015, Ministry of Tourism launched the Swadesh Darshan Scheme to develop circuits having tourism potential e.g. Tourist reception Centers, Solid Waste Management, Streetlight, Landscaping, parking etc. where the Private Sector is not willing to invest.
An Indian Institute of Heritage and Conservation under Ministry of Culture with the status of a deemed University.
Urban areas support about 30% of India’s population and contribute to more than 60% of India’s GDP. These figures are expected to grow to 40% and 75% respectively by 2030.
|40% (and 50% by 2050)|
|Contribution to GDP||63%
Urban: Census Definitions
Census-2011 definitions of urban area:
|Statutory towns||Census towns|
|If an area is governed by a municipality, corporation, cantonment board or notified town area committee, etc.||If an area doesn’t have municipality etc. yet it could be counted as a ‘town’ if it has:
1. Min. 5000 people; and
2. Min. population density: 400/sq km and
3. Min.75% of males engaged in non-agro;
|Total 4000+ in india||Total 3800+ in india|
Constitution (74th Amendment) Act, 1992 defines a metropolitan area in as, an area having a population of ten lakhs or more comprising of one or more districts.
In 2017, Govt. merged into:
- Ministry of Urban Development and Housing
- Ministry of Urban Poverty Alleviation into a single ministry called as Ministry of Housing & Urban Affairs which consists of:
|· Central Public Works Department
· National Buildings Organisation (NBO)
|· Delhi Development Authority, Rajghat Samadhi Committee,
· Delhi Urban Arts Commission, National Capital Region Planning Board
|· National Institute of Urban Affairs
· Building Materials & Technology Promotion Council (BMTPC)
· Central Government Employees Welfare Housing Organisation
· National Cooperative Housing Federation of India (NCHFI)
|· Town & Country Planning Organisation
· Government of India Stationery Office
· Department of Publication (responsible for printing Gazettes)
|mHariyali App launched in 2019 to encourage Public to plant trees & uploads it geo-tagged photos through App.|
|· Housing and Urban Development Corporation Ltd. (HUDCO)
· National Buildings Construction Corporation Limited
· Hindustan Prefab Limited (HPL)
In 2015, NDA govt launched Urban Rejuvenation Mission with two components:
- 500 AMRUT cities
- 100 Smart cities.
Amrut Mission (2015): 500 Cities
- In 2005, UPA govt. launched Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
- In 2015, govt. rechristened JNNURM as Atal Mission for Rejuvenation and Urban Transformation (AMRUT).
- AMRUT Aims to improve basic infrastructure – public transport, water supply, sewerage, storm-water drains, green spaces and parks.
- Scheme is not 100% funded by Union.
- Validity: 2015 to 2020. It is a five year sunset scheme, covering 500 cities with population of 1 lakh and above.
Smart Cities Mission (2015): 100 Cities
- SCS is a city with smart physical, civic and economic infrastructure. It provide smart technology, utility & mobility to its residents through 0% bureaucratic hassles & 100% use of Information and Communications Technology (ICT). Although ICT and computerization itself is not the ‘end goal’ of a smart City. The end goal is to improve quality of life, ease of living, economic growth and sustainable development.
- Nodal Agency: Urban Development Ministry.
- Core Scheme i.e. not 100% funded by Union.
- To implement this project, every smart city is required to set up a Special Purpose Vehicle (SPV) company under the Companies Act.
|Infrastructure||Facilities in a Smart City|
|Electricity||Automated streetlights, Smart electricity grids, Rooftop Solar|
|Water||Heavy penalties for littering & water wastage. Facilities for rainwater harvesting, storm water drainage.|
|Transport||· Walking lanes, public cycle sharing, public transport within 10-15m waiting time. Multimodal transport: Bus Rapid Transit System (BRTS), Waterways, railways (Metrorail, Monorail, Trams etc.)
· Bypass, underpass, overbridges, smart traffic signals to prevent traffic congestion. ICT to send automated challans to traffic violators.
|Housing||100% housing to all with 24/7 water, electricity and Wi-Fi connectivity. School, Mall, Parks available within 400m of residential area.|
|Education||From nursery to college- all educational facilities will be available.|
|Healthcare||From Primary Health Care Centre to multispecialty hospital and even veterinary hospital for the pets will be available.
– 108 ambulance with maximum 30 minutes of response time.
|Communication||Wifi in all houses. Apps and emergency helplines to connect with medical / fire / police.|
|Economic||Bank-ATM, Centres for Skill Development & Startup Incubation; Warehousing, Freight Terminals, Export Parks|
- India is a country of poor people and rural people. So, instead of spending in big cities, it would have been better to spend on 10,000 towns and villages where people are struggling for basic amenities like water and electricity.
- Excessive reliance on ICT in city administration makes us more vulnerable to hacking & cyber warfare. City will completely stop functioning if electricity gone during natural disasters / nuclear attacks.
- Nothing will be free except the Wi-Fi because the SPV company will charge user-fees on everything from water, sanitation, education and healthcare.
- Soul of the city & sense of the community will be lost. It will become an artificial jungle of concrete and internet cables where nobody has time for anybody except their electronic gadgets.
Arguments in favour:
Smart city will improve the quality of life & create economic opportunities. And looking at such best cities, even the voters in the small cities will become more assertive in demanding better quality of city administration from their municipal corporators, then even small towns will become more clean and comfortable to live.
Sister City project:
- In 2020, Urban ministry found some Smart cities are lagging behind in implementation of projects.
- So, Top-20 best performing smart cities will be paired with Bottom-20 worst performing smart cities as ‘Sister Cities’.
- g. Ahmedabad (Rank 1) paired with Chandigarh (Rank 81)
- Advantages: Sharing of best practices with each other, inspiration & motivation etc.
Floor Space index (FSI)
- It prescribes the maximum construction that can be done in a given area of land.
- Increase in FSI means more number of floors may be created and more residents may be accommodated in a single building.
- Norms are decided by the Municipal / Local bodies / State Government.
Indices for Quality of Life:
In 2020, Urban ministry launched two indexes/indices to assess quality of life of citizens in 100 Smart Cities and 14 other Million Plus Cities viz.
- Ease of Living Index (EoLI)
- Municipal Performance Index (MPI)
India is a fast urbanizing country and is witnessing a steady increase in migration from rural areas to urban centers. This poses stress on the already overburdened infrastructure of the cities. SDG Goal 11 requires India to work towards Sustainable cities and communities.
Sugamya Bharat Initiative (2014):
- Nodal Agency: Divyang-jan Dept (Ministry Social Justice and Empowerment)
- Ramps in public buildings, railways, airports; toilets for wheelchair users, Braille symbols and auditory signals in lifts, disabled-friendly websites etc. so that life becomes easier for the differently abled. (image)
- Under Accessible India Campaign (Sugamya Bharat Abhiyaan), Divyangjan Dept. hires auditors to check public buildings & websites and then respective organization required to do above things under the Persons with Disabilities Act. Grants are given as & where required.
- Awareness generation, IEC, mobile app etc.
Urban And Rural Infrastructure: Housing For All By 2022-
- 1985: Indira Awas Yojana for rural areas gave money to poor families to build homes,
- 2008: Rajiv Rinn Yojana for urban areas gave home loan Interest subsidy to poor.
- 2015-16: NDA Govt. restructured them into Pradhan Mantri Awas Yojana (PMAY).
- It is a Core Scheme i.e. not 100% funded by Union.
- PMAY has two components:
- PMAY (Urban)
- PMAY (Rural)
- Launched by Ministry of Housing and Urban Affairs.
- It has four components:
- If person owns land: ₹ 1.50 lakh to build or renovate his house.
- If a builder is keeping 35% apartments’ quota for EWS then he gets subsidy.
- Slum redevelopment
- Credit-linked subsidy scheme (CLSS): Depending on the annual income, the beneficiaries are classified into 3 groups:
- Economically Weaker Section (EWS),
- Low Income Groups (LIGs)
- Middle Income Groups (MIGs: i.e. annual income upto ₹ 18 lakhs).
These groups are given 3-4% interest subsidy on loan amounts upto “specified” lakhs. Govt has setup Credit-linked Subsidy Services Awas (CLAP) Portal where beneficiary can track his application status in real-time.
- By Ministry of Rural Development .
- Beneficiaries are identified through SECC- 2011 data, and verified by Gram Sabha. They’re given money to build home.
- ₹ 1.50 lakh (plains area),
- ₹ 1.60 lakh (hilly states)
- Additionally, they can get upto ₹ 70,000 as bank loans
- Money transferred to beneficiary’s bank account via AwaasSoft web platform.
- Convergence with other schemes to provide electricity, LPG, drinking water & toilet.
- Also provides skill programs for rural masons.
National Urban Housing Fund 2018:
- Nodal Agency: Ministry of Housing and Urban Affairs: (Autonomous body) Building Materials and Technology Promotion Council.
- They will raise mobilize ₹ 60,000 crores in next 4 years to finance the PMAY (Urban).
- This money will be raised through ‘extra Budgetary Resources’e. BMTPC itself borrowing from market / CPSEs / lenders without involvement of Govt.
Sustainable Housing and Global Housing Technology Challenge (GHTC) 2019:
- Nodal Agency: Ministry of Housing and Urban Affairs.
- Asked experts and private sector companies to propose disaster-resilient, environment friendly, cost-effective and speedy construction technologies.
- They will be implemented on a pilot basis in some cities to see the results.
Model Tenancy Act, 2019:
- In 2019, RBI’s quarterly residential asset price monitoring survey (RAPMS) found that housing affordability has worsened over the past four years. People’s income failed to keep pace with rising property prices. In Mumbai, difficult to find home even with a budget of ₹ 45 lakhs.
- Since it is not possible to construct houses for each and every one, we also need to promote rental housing especially for migrant workers. But, current Rental Laws are archaic.
- So, 2019-July Ministry of Housing & Urban Affairs drafted a Model Tenancy Law with following features, and asked States to adopt it:
- It covers properties rented for residential, commercial, educational use.
- Specific provisions about security deposit, mechanism to increase rental amount- in a way that it protects both the tenant and landlord.
- If tenant doesn’t vacate the premises after rent-period is over or damages the property, then heavy penalties on him.
- Collector rank officials will be designated as ‘Rent Authority’.
- Higher appeal to Rent Court – Rent Tribunal. Disputes will be settled within 60 days deadline.
A homeless family is more vulnerable to crime, disease & disasters. SDG Goal 11 requires India to provide safe and affordable housing to all by 2030.
Ministry of Rural Development:
|· Dept. of Rural Development.
· Dept. of Land Resources.
|· National Institute of Rural Development and Panchayati Raj- Hyderabad.
· Council for Advancement of People’s Action and Rural Technology (CAPART) chaired by the Union Minister for Rural Development to coordination with NGOs & Government.
Shyama Prasad Mukherjee Rurban Mission:
- In 2004, President Kalam suggested PURA (Providing Urban Amenities in Rural Areas), but failed to take off because inter-ministerial miscoordination in UPA.
- NDA govt. repacked PURA as SPMRM in 2016
- Nodal Agency: Rural Development Ministry.
- Core Schemee. not 100% funded by Union.
- Strategy: 15-20 villages clusters are selected. They are given finance to improve Electricity, water, roads; centres for Agri Processing, Tourism, Skill development etc.
- As a result, the economic opportunity and ease of living will improve in the rural areas itself. Hence, cities also will face less migration and congestion.
Rashtriya Gram Swaraj Abhiyan (2018):
- Under UPA-era, the Panchayati Raj Ministry had following schemes:
- Backward Region Grant Fund (BRGF): Additional Funds to backward areas to build schools, roads, streetlights etc.
- Rajiv Gandhi Panchayat Shasaktikaran Abhiyan: Funds for Panchayat Building renovation.
- Rashtriya Gram Swaraj Yojana (RGSY) for training of PRI’s elected representatives & civil servants.
- Since 14th Finance Commission provided huge grant in aid to the Panchayati Raj bodies, so govt. stops these schemes from 2015.
- In 2018, Govt. launches Rashtriya Gram Swaraj Abhiyan (restructured) with basically above features i.e. Panchayati Raj Institutions (PRIs) given funds to improve e-governance, repair and renovate panchayat building. PRI officials given training & exposure visits, improvised their capacity building so that they become capable to achieve SDG goals.
- Nodal Agency: Panchayati Raj Ministry.
- Core Schemee. not 100% funded by Union. (Gen-60:40, Sp.Cat-90:10)
MPLADS (1993): Members of Parliament Local Area Development Scheme
- Nodal Agency: Ministry of Statistics and Programme Implementation (MoSPI).
- Central Sector Schemee.100% funded by Union.
- Each MP can suggest development works worth ₹ 5 crore per year in his constituency. For Rajya Sabha MP, any district in his State. Nominated MP can select any district in anywhere in India.
- Role of the Members of Parliament is limited to recommend works. Thereafter, it is the responsibility of the district authority (Collector) to sanction, execute and complete the works recommended within the stipulated time period.
- If area inhabited by SC then 15% fund quota for their development works, 7.5% for STs.
- 20 lakhs / year (out of his 5 cr quota) for PH welfare e.g. giving tricycles, artificial limbs, hearing aids etc.
- Further, if any MP wishes, he may also recommend works anywhere in India upto 25 lakhs per year (out of his 5 cr quota) e.g. during natural disaster or to promote national unity.
- MPLADS Funds are non-lapsable in nature i.e. if not used this year, it is carried forward to the next year.
Corona-2020: Govt suspend this scheme for 2 years which will save about ₹8000 crores. Total amount will be transferred into the Consolidated Fund. Govt justified it, “every rupee was needed to bolster the resources available to our nation as we address the impact of Covid-19”
Adarsh Gram Yojanas:
|Saansad Adarsh Gram Yojana (SAANJHI)
|· Rural Development Ministry (2014).
· Members of Parliament adopt village in their constituency (if nominated member then adopt anywhere)
· MP to give personal attention to develop these villages through better implementation of existing schemes.
· MP to encourage the villagers to build library via donation, prepare village song, remember martyrs, celebrate girl child birth, plant trees etc.
|Pradhan Mantri Adarsh Gram Yojana
|· Social Justice Ministry (in 2009, by UPA launched- NDA continued)
· Govt to focus on villages with than 50% Scheduled Caste (SC) population:
· Develop these villages through better implementation of existing schemes.
· A village is declared ‘Adarsh Gram’ once it achieves minimum 3 targets from a long list of targets related to school enrollment, 100% adult literacy, 100% vaccination, 100% ODF-free, 0% child marriage, 0% drinking of liquor in public places etc.
Ministry of Communication:
|· Dept. of Telecommunications
· Dept. of Posts
|· Telecom Regulatory Authority of India (TRAI)
· Telecom Disputes Settlement and Appellate Tribunal (TDSAT)
|PSU / PSB
|· BSNL: Bharat Sanchar Nigam Limited & MTNL: Mahanagar Telephone Nigam Ltd for Delhi & Mumbai.
· BBNL: Bharat Broadband Network Ltd.
· Telecommunications Consultants India (TCIL) Ltd
· Indian Telephone Industries (ITI) Ltd
· India Post Payments Bank (IPPB) Ltd.
|Attached / subordinate
|· Universal Service Obligation Fund
· Telecommunication Engineering Center
|Centre for Development of Telematics (C-DOT)|
Data Security Council is a (private sector) not-for-profit body on data protection by NASSCOM. NASSCOM is a not-for-profit association of Software companies.
- 1999: Telecom Regulatory Authority of India (TRAI), a statutory body under the Communications Ministry.
- Higher appeal lies to Telecom Dispute Settlement And Appellate Tribunal (TDSAT).
- TRAI regulates the operators of telecom, internet, DTH/cable TV sector.
- TRAI’s notable initiatives for consumer interest are:
- DND (Do Not Disturb) registry to prevent Telemarketing Calls/SMS.
- Strong directives to reduce Call-drops in mobile plans.
- MySpeed App to help customers to measure 3G/4G speed & share with TRAI.
- Directives for Net Neutralitye. Internet Service Providers (ISPs) must treat all internet traffic equally without increasing/slowing down speed towards any website.
- DTH / Cable operators required to give customer the freedom of choosing channels, and fixed prices for services.
- Telecommunication Consumers Education and Protection Fund (TCEPF) introduced in 2007. Requires Telecom service providers to deposit all unclaimed money of consumers, including excess charges and security deposit.
Central Equipment Identity Register portal:
- By Dept of Telecom
- If your mobile gets stolen or lost, file First Information Report (FIR) in Police and upload FIR details and International Mobile Equipment Identity (IMEI) on this portal.
- Government will block the IMEI number of the phone so phone will become unusable for the thief.
Tele-density is number of telephones per 100 population, is an indicator of telecom penetration in the country.
|Tele-density in 2019:|
2G Spectrum Scam:
- To run telecom business, following things required:
- Access to Spectrum. Spectrum refers to the radio waves that are used by mobile phones to transmit data.
- UPA-1: Govt. will give license by “First Come First Serve Basis”, and whoever gets the license, he will automatically get free 2G spectrum linked with his License.
- Scam: Certain shell companies who had no intention of actually running telecom business applied and got licence & free spectrum. Later on, they sold it to the needy companies at higher prices, thus, making windfall profit without doing any business at all.
|· Company has to separately apply for Unified License (i.e. valid for both voice and data services)|
|· Company has to separately buy Spectrum through Dept of Telecom’s auctioning.|
Adjusted Gross Revenue (AGR):
- In early 90s, Under the LPG reforms, private sector telecom companies were allowed to begin operate in India.
- They had to obtain telecom licenses & pay certain fees to the Government every year.
- This fees is calculated as a % of their Adjusted Gross Revenue (AGR).
- Later, Department of Telecommunications (DoT) and Private Telecom Companies differed over the definition or formula of AGR. Appeal went to Supreme Court.
- SC ordered companies to pay, but they are making excuses.
- But, technical controversy beyond the scope of competitive exams.
Interconnect Usage Charges (IUC) and Controversy:
- IUC is a fee that one telecom company (e.g. Jio) pays to another company (e.g. Airtel) when its (Jio customers’) makes a call to a user of that other company (to airtel)
- The charge is decided by TRAI on a per minute basis.
|2019||Jio started levying IUC from its Jio-customers when they make calls to non-jio customers.|
|2020||TRAI is likely to reduce IUC to ZERO paise.|
Digital India Programme:
- Nodal Agency: Ministry of Electronics & IT.
- Central Sector Scheme i.e. 100% Funded by Union.
- 1977 – : National Informatics Centre (NIC) to develop websites, softwares, ICT services for government of India
- 2006: Manmohan’s National e-Governance Plan (NeGP)
- 2014: Modi’s Digital India Mission by restr
- ucturing above thing:
- Digital India program 9 Pillars:
- Broadband Highways:
- Communication Ministry’s Department of Telecom (DoT)
- Bharatnet Project/ National Optical Fibre Network (NOFN): Connect all 2.50 lakh+ village Panchayats with broadband.
- National Broadband Mission: To provide broadband access to all villages by 2022.
- State Wide Area Network (SWAN) to run State Government website & e-governance services.
- MeghRaj platform: To provide Cloud Computing services
- Advantages: Cloud servers can store the file & run the software Apps so that individual Govt. organizations needn’t buy very powerful CPU/large hard disks etc.
- National Knowledge Network (NKN): to provide highspeed internet (Gbps speed) to all universities, libraries, laboratories, healthcare, research & agricultural institutions.
- Universal Access to Mobile Connectivity:
- Telecom companies required to pay to DoT’s Universal Service Obligation Fund (USOF) to fund and support new mobile towers in unconnected rural / remote / LWE (naxal) areas.
- Public Internet Access Programme:
- MEITY: Setup Common Services Centre (CSC) in all 2.50 lakh+ gram panchayat. So, even if a poor man doesn’t own PC/mobile, he can use CSC to apply online for exams/schemes/certificates, check result, pay bills etc.
- Dept of Post to create similar facilities in 50 Lakh post offices.
- e-Governance and 5. e-Kranti – Electronic Delivery of Services
- Develop more apps, websites and portals to reduce to improve Govt’s efficiency, reduce corruption. e.g. Finance Ministry’s Dept of Expenditure Controller General of Accounts (CGA) à Public Financial Management System (PFMS) web portal to disbursal of scheme money.
- Same CGA àBharatkosh webportal for transactions related to govt’s “Non-tax revenue receipts” e.g. selling Yojana / Kurukshetra magazines online.
5. Dept of Post: online tracking of speed post, online sale of postal stamps.
- Similarly, portals and apps for paying taxes, getting passport, registering a company, applying for admissions etc.
- Information for All:
- in: to facilitate 2-way idea exchange between citizens and Government for good governance.
- gov .In: researchers can obtain datasets related to ministries, departments, Macroeconomic indicators etc.
- E-taal portal: It tracks the statistics of govt-citizen transactions e.g. “x” number of RTI applications filed online by the people in “y” age group from “z” state.
- IGNOU, Delhi University etc. given funding to put their courses / learning modules online.
- mKisan app/portal for e-extension services to farmers. And so on….
- Refer National Policy on Electronics (NPE) Manufacturing
- IT for Jobs:
- IT companies given subsidies and tax benefits for setting up BPO/call centers in North East.
- More computer courses for villagers and ITIs.
- Early Harvest Programmes:
- It focuses on the projects which are to be implemented within short timeline. e.g Biometric attendance in govt organisations to check the absenteeism of employees, teachers and students
- Women and Child Ministry: Khoyapaya portal to announce lost children so others may inform the authorities.
- Labour Ministry: Pencil portal to send complaint about child labour.
- HRD Ministry: Convert all school books into ebooks.
- IMD + NDMA: SMS based weather information and disaster alerts
- MEITY’s CERT-In: Cyber Swachhta Kendra webportal for free tools for removal of botnet / malware / ransomwaresuch as Petya, WannaCry etc.
- MEITY’s Digilocker: It’s similar to google drive to store files. citizen opens an online account linked with Aadhar number.
- He can store his important documents
- Organizations can send electronic copies of documents (e.g. driving license, Voter ID, School certificates) directly into his lockers.
- He can even sign documents using eSign facility.
|Q. Which of the following is/are the aim/aims of “Digital India” Plan of the Government of India? (CSE-2018)
5G Revolution In India:
Fifth generation (5G) of wireless technology which has capability to clock 2 to 20 Gbps speed, which is much higher than present 4G which gives 6-7 Mbps speed.
|Latency||It is the of time taken by data to travel between its source and destination. 5G has very low latency.|
|Network slicing||Mobile operators to create multiple virtual networks within a single physical 5G network. Provide faster data to tele-surgery in rural areas, driverless car, etc.|
- Thus, 5g is useful in Internet of Things (IoT) and machine to machine (M2M) communications, CCTV surveillance, drones, real time data analytics, industrial revolution 4.0.
- 5g waves have wider coverage, so less number of towers required to cover large area, so less energy compared to 4g towers.
- People will have to upgrade their devices to use 5g. this will benefit in Make in India, employment opportunities.
- Considering these benefits, USA, China, S. Korea are working on war-footing to implement 5g. Our Department of Telecom too had setup J.Paul Raj Committee, it prepared a roadmap for rollout of 5G telephony in India by 2020.
- 5g technology can work in the millimetre bands of 24.75 to 27.25 GHz spectrum. So, Government planning to auction these “millimetre bands spectrum auction” in 2020.
5G Hackathon by DoT (2020):
- 2020: Department of Telecommunications (DoT) has launched ‘5G Hackathon’ in association with NITI Aayog, MEITY, MSME Ministry, IITS & other academic and industry stakeholders.
- Individuals and teams to give innovative ideas and solutions related to 5G, reward kept as prizes worth total ₹2.5 crores.
NEST Division in MEA
New, Emerging and Strategic Technologies (NEST) division created by the Ministry of external affairs (MEA) for collaboration with foreign nations for 5g, artificial intelligence etc.
Private Initiatives For Internet:
|Star-link Network Project
|· By Elon Musk, the founder of Tesla e-cars & Space-X company.
· Aims to launch 12,000 internet-providing satellites by 2027.
· It will provide high-speed and affordable internet at global level.
|· Facebook project to use solar powered drones for delivering internet in remote areas.
· Although 2018, company abandoned the project.
|· Google company’s project to provide internet connectivity in remote / hilly locations using helium balloons.|
SDG Goal 9 (infrastructure) requires India to provide Universal telephone and internet connectivity to all. Above scheme / policy helps in digital access, digital inclusion, digital empowerment and bridging the digital divide. Thus, it will play an important role in transforming India into a knowledge-based economy and digitally empowered society.
ES2019: Public Data: For The People, By The People
- ES2019 define Data is a set of factual information stored in digital form.
- When people conduct their day-to-day activities online, they leave digital footprints- in chatting, searching google, buying on amazon, file taxes, posting on social media etc. While doing these activities online, people produce data about themselves which is stored on public and private servers.
Types of Government Data:
- Administrative data: Birth-death records, pensions, tax records, marriage records, crime reports, land-property registrations, vehicle registrations etc.
- Survey data: Census data, National Sample Survey data about employment, education, nutrition, literacy etc.
- Transactions data: e-National Agriculture Market data, Taxes, User-fees such as railways etc.
- Institutional data: Public school data on pupils, public hospital data on patients, etc. Most such data are held locally, predominantly in paper based form.
Data: Opportunities through Data integration:
Since the Administrative, Survey, Transaction and Institutional datasets are unconnected, each ministry only has a partial picture. If all these public data sets are integrated then:
- While filling every new form, Person will not have to provide same details e.g. his education, address proof, farm-land ownership proof etc.
- Weeding out bogus beneficiaries from one and all.
- National health register: Similar to Digilocker it’ll contain medical records of patient tied with his Aadhar. Benefits:
- During emergency doctor can access the medical history, even if patient is unconscious
- surveillance of syndromes
- immunization information.
Digital Dashboard for Transparency & Accountability:
- A district education officer can make better decisions if he knows, for each school in his district, attendance rates of students and teachers, average test scores and status of school toilets.
- Parents can make better decisions about which school to send their children to if they know the average absenteeism rate of teachers in their village and can compare the rate to that in the neighboring village.
- Researchers can use such data to validate the efficacy of Govt schemes and suggest remedies for future. (Union government’s already launched Open Government Data platform for this.)
- Private sector should be given selected databases for commercial use, after paying fees to Govt. for example:
- If school test scores’ data of a given district and city is sold to a coaching company, it can use it for more targeted advertising/setting new classrooms in the areas accordingly. So, the company will benefit, parents will benefit.
- Similarly, Uber can use public bus transport / passengers data to identify congested areas, deploy more taxis / rickshaws in the peak hours accordingly.
- Since govt is selling data à It will earn a new stream of revenue to control fiscal deficit.
Considering these benefits, in Sept 2019 MEITY setup Kris Gopal Krishnan Committee for the regulation of non-personal data such as community data, anonymous data.
Telangana Government’s Samagra Vedika initiative:
Using the name and address of an individual as common identifier, Telangana Government linked 25 Government datasets such as:
- crimes, assets, electricity connection, subsidies, education, taxes etc
- Each individual was then further linked to relatives such as spouse, siblings, parents and other known associates.
- This helps in detection of crime. Identifying ineligible/fictitious beneficiaries.
Union Government is also “linking” of Bank account datasets – primarily through Aadhaar number, PAN database, mobile numbers. It helps combing through transaction records, find out tax evaders and Benami accounts.
Govt efforts to release statistical data
Following initiatives to help the policymakers, researchers, innovators, data scientists, journalists and citizens to find statistical information related to governance:
- National Informatics Centre (NIC) → Open Government Data (https:// data.gov.in)
- NITI announced to launch National Data and Analytics Platform (NDAP) in 2021
Challenges in public data:
- If Data Privacy is breached or data is leaked accidentally, it may bring forth legal consequences, financial implications and disruption in family / social life. E.g. if death certificate leaked online that patient has died of HIV/AIDS. His entire family may be ostracized by the neighbors.
- If data is hacked: financial loss, national security.
- A majority of the poor still have no digital footprint. Existing paper-based data need to be converted into digital form. Govt can ask citizens to become volunteers, even launch App.
- District government official should be trained in “How to use data for analytical decision making?” Otherwise mere collection of data will be of limited use.
- Many State govt create ‘online dashboards’ for monitoring schemes but These dashboards are not easily accessible to citizens, they require password; sometimes portals are not functional or contain outdated data.
Public Data: Way forward
If scattered public data is integrated it will bring greater accountability in public services and improve targeting in welfare schemes. Therefore, just like highways, government needs to view data as a public good and important infrastructure. Govt should make necessary investments in it, while protecting data privacy. In the spirit of the Constitution of India, data “of the people, by the people, for the people” must therefore become the mantra for the government.
- Infrastructure projects require large amount of investment. Govt alone can’t finance it due to fiscal deficit targets.
- Such projects also require the level of technical expertise, management skills and professionalism that may not be available in the traditional bureaucratic apparatus.
- Therefore, Infrastructure investment / development has to be done through:
- PPP: BoT , BOOT
- Non-PPP: such as EPC, Outsourcing (Contracting-Out)
- Or a mixture of both using Hybrid Annuity Model
- PPP (Public Private Partnership):
- PPP is a long-term contract between a public sector organization (Union/State/Local Body/PSU) and a private sector company:
- to build a public infrastructure (highway, ports etc.) or
- to provide a public utility service (electricity, gas, water, transport, health etc.).
- In such PPP contract the ownership, risks & rewards are shared in some fashion. (Unlike privatization where it’s completely transferred from public sector to private sector.)
- PPP can be:
- For a Greenfield project: g. GMR group building fresh new airport in Hyderabad. or
- for a Brownfield project e.g. Private companies upgrading the existing airports at Delhi and Mumbai.
- Done by forming a Joint Venture (50:50) or Special Purpose Vehicle (SPV) company with equity from public and private sector. Or
- Done by Govt granting ‘Concession / lease / licence / permit’ (a legal right) to private company (Concessionaire) to design, develop, finance, construct, operate, maintain a greenfield / brownfield infrastructure asset.
PPP (GREENFIELD) MODELS:
|Parameters||(BoT: Toll / Annuity)||DBFO / BOOT|
|Owner||Private player but after time limit is over / his investment recovered, the ownership transferred to Govt.|
|Private player responsible to arrange from his pocket / market.|
|Who is the responsible for the building, operation and maintenance (O&M)?||Private player during the contact
period, then government itself may start operating it (or outsource it to a third private company)
|Toll/Fees collecting authority||– If BoT: Toll model then Private player levies toll from users (e.g. highway)- but he’ll face a risk- what if less traffic!
– If BoT: Annuity model then Govt pays private player fixed fund at regular period from its budget.
|Could be toll or annuity depending on project.
E.g. Delhi-Mumbai highway – private players would love to have a Toll model, whereas in Nagaland Manipur highway they’d prefer annuity model due to less growth projection in traffic.
|Water pipelines contract by Corporations|
- Build-Lease-Transfer (BLT): Usually associated with brownfield projects e.g. Govt owned existing airport is leased to private player for operation, he renovates it and charges user fees for same. After the contact period is over / investment recovered then govt again assumes operational responsibilities (or gets another private player). Thus Govt remains the owner in perpetuity.
- Toll-Operate-Transfer (TOT): Private player pays upfront fees (e.g. ₹ 15000 crore) to the government to obtain the ‘right to collect toll’ on an existing road (brownfield) for a fixed period (e.g. 50 years).
- To Government: we got upfront money to finance schemes / build new roads; no need to pay salary of those toll-booth employees.
- To private player: we will make profit depending on how much traffic comes.
- 2018: NHAI award projects worth 680+ kms in Andhra Pradesh and Gujarat.
Budget-2020: due to FASTAG toll collection became more easier. So, Govt. will monetise at least twelve highway bundles worth 6000+ Kms before 2024
In these models, the private player is not given ownership of infrastructure or right to collect toll/user fee at any point of time. So, they’re not PPP. Notable examples are:
– Engineering, Procurement and Construction (EPC)
– Outsourcing / Contracting out
|Parameters||PPP model (BoT: Toll)
|Non PPP models e.g. EPC, outsourcing, GoCo|
|Owner||Private player owns until contract time expired/ his investment recovered.||Govt owns in perpetuity.
|Who is the responsible for the building, operation and maintenance?||Private player
|Toll/Fees collecting authority||Private player
|Govt pays the private player. Govt itself will collect user fees or arranging finance from budget.|
Non-PPP: GOCO For Indian Army-
- Army’s Central Ordnance Depot (COD) and Army Base Workshops (ABWs) are responsible for manufacturing & warehousing, maintenance, repair and overhaul (MRO) of: Weapons, Ammunition, Tanks, Trucks, Radars, Air defense system etc.
- Clothing, footwear, headgear, tent & camping gears, kitchen equipment etc. But,
- 2015: CAG audit found them to be overstaffed, inefficient and slow.
- 2016: Defence Ministry’s Lt. Gen. DB Shekatkar (Retd.) committee to “enhance combat capability and re-balancing defence expenditure.” Committee recommended GOCO Model.
Government – Owned Contractor – Operated (GOCO) model:
- GOCO model: private contractors operate the army’s base workshops that repair equipment from guns and vehicles to tanks and helicopters.
- Government remains the owner of the ABW workshop / COD depot
- But a private player is given a contract to take over the operation / running of such a workshop / depot. He will be responsible for warehousing operations, transportation of material, repair, maintenance etc.
- He will have to absorb the existing civilian employees working there.
- Private player must be an Indian registered company with at least 10 years of working experience & “y” crore of turnover.
|· Decreased salary bill for Government
· Private operators can easily go into partnership with Original Equipment
|· Private operators may not have the expertise to deal with military equipment;
|· Manufacturer (OEM) for service, repair and spare parts.
· Private firms will not have to invest in land, infrastructure, machinery. Because Government already built that.
|· Private companies interested in bidding mostly for workshops/Depots that handle Combat Tanks because they can easily charge Rs 8-9 crore for tanks’ repair/services/spare parts every time. Whereas not much profit in clothing/kitchen utensils/cooking stove related work.
· Strategic & Security challenges: what if private player sells the tank/radar blueprints to Pakistan/China?
Hybrid Annuity Model (HAM):
- HAM is mix of PPP and Non-PPP models.
- 2016: Introduced for highway projects in India. Suppose the cost to build a new highway is INR 1000, then.
- ₹ 400: Govt pays in phased manner (as road construction progresses).
- ₹ 600: private player arranges from his pocket and / or market borrowing.
- Once the highway is finished, Govt (NHAI) starts collecting toll → pay the private player at regular interval (called as annuity) till the private player recovers ₹ (60+some profit).
|PPP Model (BoT: Toll)||Non PPP Model (EPC)||Hybrid Annuity|
|Govt. has to bear the burden, results into more fiscal deficit.
|Private player bears higher burden of financing the project = less fiscal deficit for Govt.|
|BoT: Toll- Private player has the right to collect toll||Private player has no right to collect toll (But at the same time, he is also saved from the risk if sufficient traffic did not come)|
In Bharatmala Pariyojana, NHAI has decided that:
|Hybrid Annuity Model (HAM)||60%|
|BOT (Toll) Model||10%|
|Engineering, Procurement, Construction (EPC)||30%|
|Total projects under Bharatmala →||100%|
- Without waiting for the government advertisement, suppose a private company sends a suo-moto or unsolicited proposal to develop a railway station.
- Government puts it online so other private companies can challenge it.
- In 2015, While Govt of India was considering to allow Swiss challenge method for infrastructure development, but Vijay Kelkar committee on PPP reforms suggested not to do it.
- Because there is a scope for non-transparency and collusion.
Viability Gap Funding (VGF):
- Sometimes, the project is justifiable from social welfare and human development point of view but it’s not financially profitable or viable e.g. solar panels in remote villages, or airport in Ladakh/Lakshadweep.
- Then, Union Government / Multilateral Bank may provide grant (not Loan) in the form of Viability Gap Funding (VGF).
|Global Infrastructure Facility (GIF: 2004)||· By World Bank to help emerging economies and developing countries.
· It provides fund & advisory to design PPP contract.
|National Investment Fund (NIF: 2005)||· During UPA era, the revenues from disinvestment were transferred in this fund to finance various schemes, projects, PSB recapitalization.|
|India Infrastructure Project Development Fund (IIPDF: 2007)||Setup in Dept of Economic Affairs with ₹ 100 crores to help PPP projects.|
National Investment and Infrastructure Fund (NIIF: 2015)
- Total Corpus is INR 40,000 crore. Out of that 49% from Dept of Economic Affairs (Finance Ministry), remaining by domestic & foreign investors & financial intermediaries.
- SEBI registered NIIF as Category II Alternative Investment Funds.
- NIIF is ‘fund of funds’ → gives funding to other funds. E.g. 2017: India & UK set up Green Growth Equity Fund (GGEF) to finance green infrastructure projects in India. So, from Indian side NIIF invested money in GGEF.
Budget-2019: NIIF, Investment & PPP
- Presently, union ministries and Central Public Sector Enterprises have many unused land assets. Govt. will create public infrastructure and affordable housing on such land.
- India requires annually ₹ 20 lakh crores (about $300 billion) investment in Infrastructure. For this, Govt. have to encourage foreign pension, insurance and sovereign wealth funds to invest in India. So, Govt. will invite them to India through annual ‘Global Investors Meet in India’, using NIIF.
|Q. With reference to ‘National Investment and Infrastructure Fund’, which of the following statements is/are correct?_____(CSE-2017)
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
|Q. The Global Infrastructure Facility is a/an_____(CSE-2017)
National Infrastructure Pipeline (NIP):
- 15th Aug, 2019: PM Modi announced Rs.100 lakh crore would be invested on infrastructure over the next five years.
- 2019-Sept: Finance Ministry set up a task force under the Secretary of Dept of Economic Affairs (DEA). Based on its report,
- 2019-Dec: FM Nirmala S. announced NIP. It aims to mobilize 102 lakh crore worth infrastructure investment in the next five year (2019-20 to 2024-25).
- This funding will be spread across Energy (24%), Roads (19%), Urban (16%), Railways (13%), Irrigation (7%) etc.
Further, the Government will also initiate following reforms: Infra Finance Reforms-
Finance Market Reforms:
- Government and SEBI will undertake technical reforms to strengthen municipal bond market, and NBFCs such as:
- infrastructure investment trusts (InvITs),
- Infrastructure Development Funds (IDFs),
- Stringent monitoring to prevent ILFS-NBFC type crisis in future.
- FDI, FPI investment norms will be relaxed.
Credit Enhancement Fund (CEF)
- Pension and insurance companies usually avoid investing in bonds lower than ‘AA’ rating, due to strict regulatory norms by PFRDA and IRDAI respectively.
- So Government will ask them to relax the investment norms for infrastructure projects.
- Many of Indian infrastructure companies / projects have poor bond-rating. So, Government will setup a Credit Enhancement Fund (CEF), which will basically provide guarantee to such projects’ lenders → bond rating upgraded → more investors attracted.
Others reforms: NIP
- Monetization of land assets owned by Govt.
- Market based pricing mechanisms to increase user fees on infrastructure. (e.g. if electricity price increased by x% then raise metro-train- fares by y%)
- Technical guidelines for uniform quality, disaster resilient roads, buildings, etc. (e.g. x% cement with y% sand etc.)
- Training and capacity building for legal and financial experts so they can frame better type of PPP contracts – less chances of project delays or disputes or NPA.
- Legal reforms so PPP contract disputes can be settled through arbitration outside courts.
Challenges To PPP:
While the PPP-led infrastructure sector witnessed boom before the supreme crisis but afterwards facing following challenges:
- Environment groups / Civil society protest / PILs makes land acquisition difficult.
- Fall in demand post subprime crisis – less cargo traffic in highways / seaport / airports etc. so those developers wanted extension of toll collection period / loan restructuring / extra money to finish remainder of projects but UPA’s coal scam, 2G scam and subsequent ‘policy paralysis’ where ministers, IAS & public sector bankers avoided taking decisions on any file due to fear of media & courts. All resulted into time & cost overruns for the infra-developers- NPA problems.
- Crisis in IL&FS & other NBFCs in the infrastructure finance sector.
- In PPP projects the fees paid by the users may be higher than when the project was government operated. Excessive reliance on PPP may eventually result in exclusion of poor persons from infrastructure facilities.
- Private players providing substandard services and poor construction material to keep bigger profit margin. This warranted to make Performance and service audit.
- PPP not appropriate for small sized projectsg. building a school.
- In India, PPP model projects have confined mostly to airports and highways. In other sectors, the growth is either mostly private sector led (e.g. Telecom / ICT) or mostly public sector led (e.g. Railways & atomic energy) even though there is lot of scope for synergy.
- Infrastructure is a critical determinant of economic growth. It has a direct bearing on investment, manufacturing sector, logistics and productivity. Infrastructure is equally important for social sectors – be it education or health.
- Therefore SDG Goal 9 focuses on building resilient & sustainable infrastructure.
- In India, infrastructure gaps exists in most of the sectors- posing a serious threat to our economic growth and sustainable development.