21 January, 2020

24 Min Read

IMF lowers India’s growth forecast

Syllabus subtopic: Important International institutions, agencies and fora, their structure, mandate.

Prelims and Mains focus: about the IMF report and its significance; about IMF and terms associated to it

News: The International Monetary Fund (IMF) on Monday slashed India’s growth forecast by 1.3 percentage points to 4.8% for 2019-20, prompting the agency to also trim its global growth estimates as a result.


Growth in India slowed sharply owing to stress in the non-bank financial sector and weak rural income growth.


Finance minister Nirmala Sitharaman, scheduled to present her second budget on 1 February, is expected to increase infrastructure spending and boost rural expenditure to revive growth, which slowed to a six-and-a-half-year low of 4.5% in the quarter ended 30 September.

Contrasting figures

While the Indian government’s statistics department and the Reserve Bank of India (RBI) have estimated growth in 2019-20 at 5%, rating agency Moody’s Investors Service has projected growth at 4.9% for the fiscal.

What did the IMF recommend earlier?

  • IMF in its Article IV consultation report on India released last month said the Indian government should avoid a fiscal stimulus to boost the economy and, instead, opt for an easier monetary policy.

  • However, retail inflation has picked up since and RBI has paused its monetary easing cycle. Retail inflation touched a five-and-a-half-year high of 7.35% in December, breaching the central bank’s tolerance limit of 6%. This may constrain RBI from not only further monetary easing in its policy review on 6 February, but may also force it to rethink its accommodative policy stance. The IMF growth projection for India shows economic downturn is quite entrenched.

IMF’s ‘World Economic Outlook’ report highlights

  • It projected global growth to increase modestly from 2.9% in 2019 to 3.3% in 2020 and 3.4% in 2021. The slight downward revision of 0.1 percentage point for 2019 and 2020, and 0.2 percentage point for 2021, is owed largely to downward revisions for India.

  • The IMF report, however, projected India’s growth to revive in 2020-21 to 5.8%, 30 basis points below its October estimate, supported by monetary and fiscal stimulus as well as subdued oil prices.

  • IMF raised China’s growth estimate by 20 basis points to 6% for 2020, reflecting the signing of the phase I trade deal with the US.

  • Despite several headwinds, IMF said some indications have emerged towards the year-end that global growth may be bottoming out. The report, however, warned that downside risks remain prominent, including rising geopolitical tensions, notably between the US and Iran, intensifying social unrest, further worsening of relations between the US and its trading partners and deepening economic friction between other countries.

  • The pickup in global growth for 2020 remains highly uncertain as it relies on improved growth outcomes for stressed economies like Argentina, Iran, and Turkey and for underperforming emerging and developing economies such as Brazil, India, and Mexico. A materialization of these risks could lead to rapidly deteriorating sentiment, causing global growth to fall below the projected baseline.

Way ahead

  • The economic slowdown seems to be sharper than estimated. This is a wake-up call for the government ahead of its 1 February budget, which is likely to address the economy’s structural weaknesses and recalibrate spending within the available fiscal space. With inflation crossing the central bank’s tolerance limit, the ball is now in the government’s court to revive growth.

  • Monetary policy having run its course, the government should spend wisely to support economic recovery.

International Monetary Fund (IMF)

Bretton Woods

  • Bretton Woods is a place in New Hampshire State of USA.
  • In 1944, US President Roosevelt hosted a conference here, to rebuild the world economy, after Second World War.
  • Delegates of 44 allied nations came to participate (India was represented by Sir D. Deshmukh, the first Indian Governor of RBI)
  • Officially known as United Nations Monetary and Financial Conference, commonly known as Bretton Woods because of the place where it was held.

This conference resulted into creation of four important organizations viz.

  1. IMF (International monetary fund)
  2. World Bank
  3. GATT (General Agreement on Trade and Tarrif) – later becomes WTO in 1995
  4. Fixed Exchange Rate system (Discarded in 1970s)


  • HQ – Washington
  • Official language – Chinese, English, French, Russian, Spanish, Arabic
  • Formally created in 1945 by 29 member countries
  • Stated goal was to assist in the reconstruction of world’s international payment system post World War II
  • Countries contribute funds to a pool through a quota system from which countries with payment imbalances temporarily can borrow money and other resources.

IMF Quota & Voting Rights

  • Quotas was assigned to member countries reflecting their relative economic power & credit deposit to IMF.
  • Subscription was to be paid 25% in gold or currency convertible into gold (effectively the dollar, which was the only currency then, still directly gold convertible for central banks) and 75% in the member’s own currency
  • Members were provided voting rights in proportion to their quota, hence member countries with higher quota have a higher say at IMF.

Special Drawing Rights

  • Special drawing rights (SDRs) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF)
  • SDR is not a currency, instead represents a claim to currency held by IMF member countries for which they may be exchanged.
  • The value of an SDR is defined by a weighted currency basket of five major currencies: the US dollar, the euro, the British pound, the Chinese Yuan and the Japanese yen.
  • Central bank of member countries held SDR with IMF which can be used by them to access funds from IMF in case of financial crises in their domestic market

Reserve Tranche

  • A certain proportion of a member country’s quota is specified as its reserve tranche.
  • The member country can access its reserve tranche funds at its discretion, and is not under an immediate obligation to repay those funds to the IMF.
  • Member nation reserve tranches are typically 25% of the member’s quota.

Given its unequal voting power mechanism, IMF doesn’t always serve the interests of poor & developing countries, hence requires two set of reforms

  1. IMF reform in quota
  • IMF Executive board decides the Quota of each member based on various parameters including GDP & tariff barriers.
  • Higher quota gives higher voting rights and borrowing permissions, But formula is designed in such way US has ~18% quota, G7 collectively own >40% while India and Russia have barely ~2.5% each.
  • BRICS, G20 and emerging market economies are against this scheme especially after Subprime crisis and declined economic strength of USA & G7
  • 2010: Board decided to increases quota of developing countries albeit mainly by decreasing the quota of poor countries.

Problem: 70% votes required to implement this reform, not 70 nations, & the nations who collectively own 70% quota- USA, Germany, Japan etc. Hence quota reform is pending.

  1. IMF reform in governance
  • Currently in Executive board, 5 out 24 directors are permanently decided by five largest quota holders.
  • 2010: new reforms proposed: Board composition will be reviewed every 8 years + all directors to be elected, no permanent chairs.

Problem: Requires 85% votes in favour, hence governance reform is pending as well.

Source: Livemint

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SC won’t stay Electoral Bond Scheme

Syllabus subtopic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Prelims and Mains focus: about the SC judgement; arguments for and against Electoral Bonds Scheme

News: Chief Justice of India (CJI) Sharad A. Bobde on Monday orally made it clear that if the Supreme Court had found it unnecessary to stay the electoral bonds scheme (EBS), it may not stay the scheme even now.


On April 12 last, to ensure that the balance was not tilted in anybody’s favour before the May last general elections, the Supreme Court passed an interim order directing political parties to provide complete information to the Election Commission of India in sealed covers on every single donor and contribution received by them till date through electoral bonds. However, it did not stay the operation of the scheme.

Case against the electoral bond scheme by the NGO Association for Democratic Reforms (ADR)

  • New facts have come up indicating that the scheme was being frequently opened to allow funds to fill the coffers of the ruling party.

  • The scheme would be opened again now with the Delhi elections scheduled on February 8. Instead of opening the scheme exclusively for the Lok Sabha elections, as envisaged, it had become a mechanism to funnel benami funds to fuel political parties. Over Rs.6,000 crore had been drawn in through the scheme recently.

  • Both the Election Commission of India (ECI) and the Reserve Bank of India (RBI) had strongly objected to the scheme and raised the red flag against it.

  • The court should consider the scheme with a new eye as many novel and disturbing facts had come to the fore since April 12.

  • 95% of the payments through electoral bonds till date had been routed to the BJP. The ECI submitted that a lion’s share of the contributions via electoral bonds had gone to the ruling party.

What is the govt.’s stand vis-a-vis Election Commission?

  • The government has justified the scheme as an experiment to eradicate black money.

  • It claimed that the impact of the EBS would be known only after the 2019 Lok Sabha polls. It should meanwhile be allowed a free hand to execute its policy and the apex court should not pass any orders in the matter for the present.

  • The government’s position is in stark contrast to the ECI’s stand. The ECI has expressed reservations about the transparency in political funding. It submitted to the apex court that electoral bonds legalised anonymity of political donors and the parties receiving contributions. It maintained that the right to vote also meant the right to make an informed choice. It said that knowing the candidate was only “half the exercise”. The voters should also know the source of funding of political parties who prop up these candidates.

Source: The Hindu

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GS-II : International Relations West Asia
Iran says it may pull out of NPT

Syllabus subtopic: Effect of policies and politics of developed and developing countries on India's interests, Indian diaspora.

Prelims and Mains focus: about the NPT and its significance; about JCPOA

News: Iran said on Monday it will consider withdrawing from the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) if a dispute over its atomic programme goes before the UN Security Council.


  • Britain, France and Germany launched a process last week charging Iran with failing to observe the terms of the 2015 nuclear deal, a move that could eventually see the Security Council reimpose international sanctions on the country.

  • Iran has accused the three EU member states of inaction over sanctions the United States reimposed on it after unilaterally withdrawing from the landmark accord in 2018.

What was the 2015 deal about?

  • The landmark 2015 deal (JCPOA) reached with Britain, China, France, Germany, Russia and the United States gave Iran relief from sanctions in return for curbs on its nuclear programme.

  • Since the U.S. pullout, Iran has progressively rolled back its commitments to the accord in retaliation.

  • It has hit out at the three European nations that remain party to the tattered deal for failing to live up to their promises to ease the impact of U.S. sanctions on its oil-based economy.

About the Treaty on the Non-Proliferation of Nuclear Weapons (NPT)

The Treaty on the Non-Proliferation of Nuclear Weapons, commonly known as the Non-Proliferation Treaty or NPT, is an international treaty whose objective is:

  1. to prevent the spread of nuclear weapons and weapons technology,
  2. to promote cooperation in the peaceful uses of nuclear energy, and
  3. to further the goal of achieving nuclear disarmament and general and complete disarmament.

  • As of August 2016, 191 states have adhered to the treaty, though North Korea, which acceded in 1985 but never came into compliance, announced its withdrawal from the NPT in 2003, following detonation of nuclear devices in violation of core obligations

  • Four UN member states have never accepted the NPT, three of which possess nuclear weapons: India, Israel, and Pakistan. In addition, South Sudan, founded in 2011, has not joined.

  • The treaty defines nuclear-weapon states as those that have built and tested a nuclear explosive device before 1 January 1967; these are the United States, Russia, the United Kingdom, France, and China (P5).

  • Four other states are known or believed to possess nuclear weapons: India, Pakistan, and North Korea have openly tested and declared that they possess nuclear weapons, while Israel is deliberately ambiguous regarding its nuclear weapons status.

  • Critics argue that the NPT cannot stop the proliferation of nuclear weapons or the motivation to acquire them. They express disappointment with the limited progress on nuclear disarmament, where the five authorized nuclear weapons states still have 22,000 warheads in their combined stockpile and have shown a reluctance to disarm further. Several high-ranking officials within the United Nations have said that they can do little to stop states using nuclear reactors to produce nuclear weapons.

Source: The Hindu

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Global Investment Trend Monitor report: UNCTAD

Syllabus subtopic: Important International institutions, agencies and fora, their structure, mandate.

Prelims and Mains focus: about the report and its key findings; about UNCTAD

News: India was among the top 10 recipients of Foreign Direct Investment in 2019, attracting USD 49 billion in inflows, a 16 per cent increase from the previous year, driving the FDI growth in South Asia, according to a UN report released on Monday.

About the report and its highlights

  • The Global Investment Trend Monitor report compiled by United Nations Conference on Trade and Development (UNCTAD) states that the global foreign direct investment remained flat in 2019 at USD 1.39 trillion, a 1 per cent decline from a revised USD 1.41 trillion in 2018. This is against the backdrop of weaker macroeconomic performance and policy uncertainty for investors, including trade tensions.

  • Developing economies continue to absorb more than half of global FDI flows. South Asia recorded a 10 per cent increase in FDI to USD 60 billion and this growth was driven by India, with a 16 per cent increase in inflows to an estimated USD 49 billion. The majority went into services industries, including information technology.

  • The FDI flows to developed countries remained at a historically low level, decreasing by a further 6 per cent to an estimated USD 643 billion.

  • The FDI to the European Union (EU) fell by 15 per cent to USD 305 billion, while there was zero-growth of flows to United States, which received USD 251 billion FDI in 2019, as compared to USD 254 billion in 2018, the report said.

  • Despite this, the United States remained the largest recipient of FDI, followed by China with flows of USD 140 billion and Singapore with USD 110 billion.

  • China also saw zero-growth in FDI inflows. Its FDI inflows in 2018 were USD 139 billion and stood at USD 140 billion in 2019. The FDI in the UK was down 6 per cent as Brexit unfolded.

Way forward

  • Looking ahead, UNCTAD expects the FDI flows to rise moderately in 2020, as current projections show the global economy to improve somewhat from its weakest performance since the global financial crisis in 2009.

  • Corporate profits are expected to remain high and signs of waning trade tensions emerge. However, the decrease of announced greenfield projects by 22 per cent – an indicator of future trends, high geopolitical risks and concerns about a further shift towards protectionist policies temper expectations.

  • The report said that GDP growth, gross fixed capital formation and trade are projected to rise, both at the global level and, especially, in several large emerging markets.

  • Such an improvement in macroeconomic conditions could prompt MNEs to resume investments in productive assets, given also their easy access to cheap money, the fact that corporate profits are expected to remain solid in 2020, and hopes for waning trade tensions between the United States and China.

  • However, significant risks persist, including high debt accumulation among emerging and developing economies, geopolitical risks and concerns about a further shift towards protectionist policies, it added.

About United Nations Conference on Trade and Development (UNCTAD)

  • UNCTAD is a permanent intergovernmental body established by the United Nations General Assembly in 1964.
  • Its headquarters are located in Geneva, Switzerland, and it has offices in New York and Addis Ababa.
  • UNCTAD is part of the UN Secretariat. It reports to the UN General Assembly and the Economic and Social Council but have its own membership, leadership, and budget.
  • It is also a part of the United Nations Development Group.

Source: Indian Express

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GS-III : Economic Issues Terminology
India’s import substitution policy

Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Prelims and Mains focus: about the import substitution policy and its benefits and how it impacts domestic industries and overall growth of an economy

Context: The recent wave of protectionism and the US-China trade war point to a need to re-evaluate India’s trade policy. The argument in favour of higher tariffs or import substitution is that ‘infant’ domestic industries need to be protected.

Benefit of a low-tariff regime

India’s GDP growth rate has largely gone up over the years with a reduction in tariffs from 1999 onwards.

What is an import substitution policy?

  • Under an import substitution policy, a government uses trade tariffs as a policy instrument to encourage domestic industry, the idea being to substitute imports with domestic goods. This policy has been practised by many countries, including India.

  • The argument in favour of high tariffs is that in developing countries, industries are yet to develop and, therefore, need to be protected from international trade to ensure their development. This is generally termed the “infant industry” argument and was often cited to justify the policy of tariffs, licences and quotas that predated the 1991 reforms.

Is the ‘infant industry’ argument valid?

  • To some extent, the argument is valid as “infant” domestic industries would be hampered by imports of cheaper goods and commodities. But there is adequate empirical evidence, including from India’s experience, that suggests protectionism and tariff barriers act as a disincentive for domestic industries to become competitive.

  • Another issue is inputs: a higher tariff on inputs would result in higher input costs for manufacturers, which could otherwise be competitive if they could import cheaper inputs. A comprehensive view of the supply chain must be taken while making any changes to tariff policies.

What has been India’s recent trade experience?

Since 1991, the tariff policy has led to a systemic reduction in India’s weighted effective average tariff, coinciding with a sharp rise in GDP and higher growth rate, even though recent trade experience has been mixed. Several factors are behind the slow pace of export growth. The slowdown has led to a drop in the value of imports, thus shrinking the current account deficit.

Has the reduction in tariffs benefited India?

Many are against imports, but they ignore India’s experience of the last few decades when there was a systematic overhaul of the economy. Lower tariffs have come with higher growth, rise in exports and reduction in poverty at the fastest pace in India’s history. The nation has emerged as a leader in exports of IT services, and is now a key player in pharmaceuticals. As production takes place through supply chains, India has to integrate with global markets to ensure adequate labour-intensive manufacturing jobs.

What about tariffs imposed on exports?

The ongoing trade-war and recent escalation of protectionist steps between the US and China have raised the question about India’s policy response to any rise in tariffs imposed by other countries on Indian goods and services. The high-level advisory group said it would be beneficial for India not to retaliate with tariffs. Any move to raise tariffs must consider the integrated supply chains and the fact that Indian imports are largely for domestic consumption.

Source: Livemint

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GS-III : Economic Issues welfare
Oxfam India report: ‘Time to Care’

Syllabus subtopic:

  • Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
  • Role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders

Prelims and Mains focus: about the key highlights of the report regarding income disparity in India and recommendations

News: Oxfam India’s report, “Time to care”, released in Davos, Switzerland, highlights the need for Asia’s third-largest economy to plug a growing rich-poor gap.


  • The findings come at a time when the government is preparing to present the Union budget for FY21 seeking to address an economic downturn, distress in the rural economy, and improve incomes and add new jobs.

  • The Narendra Modi administration has been following a progressive taxation policy and higher welfare spending to try and tackle income inequality.

Key findings of the report

  • India’s richest 10% control more than 74% of the national wealth, while poor women and girls—the bottom of the economic heap—put in Rs.19 trillion of unpaid care work every year.

  • The gap becomes even wider when considering the richest 1% of Indians: they hold 42.5% of the national wealth, while the bottom 50%, the majority of the population, has a mere 2.8% share of the national wealth.

  • The top 1% holds more than four times the wealth held by 953 million Indians, who make up the poorest 70% of the population.

What does the report recommend?

  • The report said its findings call for a dialogue on the rising income disparity in the world’s largest democracy.

  • The Oxfam report makes a strong case for raising taxes on corporations and rich individuals to tackle poverty and lift the responsibility of care from women.

  • It said successive governments are “massively under-taxing the wealthiest individuals and corporations” and “underfunding vital public services and infrastructure” that could help reduce the workload of women and girls.

  • The gap between the rich and the poor cannot be resolved without deliberate inequality-busting policies, and too few governments are committed to these.

  • Women’s unpaid care work, it said, is taken for granted or ignoring the physical, mental and emotional effort it requires. Investments in water and sanitation, electricity, childcare and healthcare could free up women’s time and improve their quality of life.

  • Governments must ensure corporations and wealthy individuals pay their fair share of tax and increase investment in public services and infrastructure. It also argued that people who care for parents, children and the most vulnerable, an important social function, should be paid a living wage.

About Oxfam India

  • Oxfam India is leading NGO of people and organisations working hand on hand to fight inequality in India. Supporting civil society organisations in India over the past 60 years, In 2008 Oxfam registered as an Independent organisation. Oxfam is celebrating its 67th year of humanitarian service in India.

  • In 1951, Oxfam Great Britain launched its first full scale humanitarian response to the Bihar famine. In the past six decades Oxfam has supported civil society organisations across the country. In 2008, various Oxfams in India joined forces to form Oxfam India. Registered as an independent organisation, Oxfam India has indigenous staff and board members. It is a member of the global confederation of 19 Oxfams.

It focuses on four poverty eliminating goals

  1. Livelihood: More women and men will realise their right to secure and sustainable livelihoods.
  2. Fight for women: More women will lead a violence-free life. This can be achieved through changes in attitudes and beliefs about gender relations and through encouraging women's engagement and assuming leadership in institutions and decision-making roles.
  3. Education and Health: People living in poverty, especially women and, girls will realise their right to accessible and affordable healthcare, education, clean water and sanitation.
  4. Human Rights: Those facing a humanitarian crisis will be assured the protection and the assistance they need, regardless of who they are, where they live or how they are affected.

Source: Livemint

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GS-III : Miscellaneous
Naga-Kuki conflict in Manipur

Syllabus subtopic: Security challenges and their management in border areas

Prelims and Mains focus: about the Naga-Kuki conflict and its impact on India’s internal security; about strategic importance of Northeast region

News: Umbrella organisations of two tribes have called a truce in Manipur after almost four decades of violence and uneasy existence.

About the two groups in conflict

  • The conflict between the Nagas and the Kukis in 1993 had claimed more than 230 lives and displaced 1,00,000, mostly Kukis.

  • The NNPGs, which has been in talks with New Delhi since 2017, comprises the National Socialist Council of Nagaland (Unification), the NSCN (Reformation), the NSCN (Khango), the Naga National Council and two of its factions, and the Federal Government of Nagaland.

  • The KNO, which is seeking a territorial council in Manipur, is the umbrella body of 17 militant outfits now engaged in peace talks with the Centre.

Manipur’s demography

  • Manipur has a population of 2,855,794 as per 2011 census. Of this total, 57.2% live in the valley districts and the remaining 42.8% in the hill districts.
  • The hills are inhabited mainly by the Nagas, and Kukis, and smaller tribal communities and the valley (plains) mainly by the Meiteis, Manipuri Brahmins (Bamons) and Pangal (Manipuri Muslims). Bishnupriya Manipuri, Naga and Kuki settlements are also found in the valley region, though less in numbers.

About the Naga-Kuki conflict

  • On September 13, 1993, Naga militants allegedly belonging to the National Socialist Council of Nagaland (Isak Muivah) massacred around 115 Kuki civilians in the hills of Manipur. The Kukis refer to the killings as the Joupi massacre after the village which saw the highest number of casualties.

  • However, The National Socialist Council of Nagalim Isaac-Muivah (NSCN-IM) faction has accused Kukis of being responsible for the start of Naga-Kuki conflict in 1992.

  • Hostility between the Nagas and the Kukis dates back to colonial times, but the conflict of the 1990s was primarily over land: large swathes of what the Kuki claim to be their “homeland” in the Manipur hills overlapped with Greater Nagaland or Nagalim, envisioned by the NSCN (IM) as a sovereign Naga homeland. The proposed map of Nagalim consists of Nagaland and “all contiguous Naga-inhabited areas” of Assam, Manipur, Arunachal Pradesh and, across the international border, Myanmar.

  • The Kukis, one of the bigger hill tribes of the region, are spread across the North East, and even parts of Myanmar and the Chittagong Hill Tracts in Bangladesh.

Way forward

  • The working committee of the Naga National Political Groups (NNPGs) and the Kuki National Organisation (KNO) have signed a declaration to settle contentious issues and inter-community differences peacefully.

  • According to the declaration, the two sides will “work together closely to resolve differences through a democratic political process, and by respecting each other’s history and identity”.

Strategic Importance of Northeast:

Strategic Importance of North East: Northeast India has an extraordinarily important international strategic dimension and is a vital part of the nation’s defence architecture. Its importance is enumerated below:

International Border:

These states share their borders with other countries like Bangladesh, Bhutan, Myanmar and China. It makes up close to 40% of India’s land borders with its neighbours.

1. Bridge to South East Asia: The region is at the crossroads of India and Southeast Asia. It is a bridgehead between India and the vibrant economies of Southeast Asia, including southern China.

2. Economic Significance: North East is endowed with huge natural resource (oil, gas, coal, hydro, fertile land, etc) which can be harnessed for nation development.

Source: The Hindu

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Environment Impact Assessment (EIA)

Syllabus subtopic: Conservation, environmental pollution and degradation, environmental impact assessment

Prelims and Mains focus: about the EIA sought for water aerodromes and delay in it; about EIA; UDAN scheme

News: A year after 10 water aerodromes were awarded to airlines for seaplane operations, the government is yet to seek environmental clearance for them.


  • In January 2019, the government announced winners of the third round of UDAN (Ude Desh ka Aam Nagrik) — the government’s low-cost flying scheme.
  • Among the routes awarded to airlines were those that provided air connectivity to 10 waterdromes — the Statue of Unity, the Sabarmati riverfront and the Shatrunjay dam in Gujarat; the Nagarjuna Sagar dam and the Prakasam barrage in Andhra Pradesh and Havelock Island, Neill Island and Long island in Andaman and Nicobar. Eight of these waterdromes in Gujarat, Assam and Andaman and Nicobar were awarded to the SpiceJet.

About the Environment Impact Assessment (EIA) for aerodromes

  • The Ministry of Civil Aviation appointed a consultant, M/s Feedback Infra, to prepare a detailed project report in August last year. Subsequently, a proposal was sent to the Ministry of Environment and Forest (MoEF) seeking the “terms of reference” for conducting an environment impact assessment (EIA) for three waterdromes in Andaman and Nicobar, which was granted on November 25.

  • Once the EIA is finalised, the apex body under the MoEF, Environment Approval Committee, will take it up for clearance. This process is yet to be undertaken for the remaining seven waterdromes.

  • The process of seeking environmental clearance requires a lot of data such as bathymetric test. (Bathymetry is the study of underwater depth of lake or ocean floors.)

  • As per the EAC’s “terms of reference” for the waterdromes in Andaman and Nicobar, the Ministry of Civil Aviation will have to provide information about toilet waste from flights, disposal of trash collected during flights and waste from eateries and shops at the aerodromes. Details have also been sought about the impact of noise on the sensitive environment and presence of corals.

What is Environment Impact Assessment (EIA)?

  • UNEP defines Environmental Impact Assessment (EIA) as “a tool used to identify the environmental, social and economic impacts of a project prior to decision-making.”

  • Environmental Impact Assessment (EIA) is the process of examining the anticipated environmental effects of a proposed project – from consideration of environmental aspects at design stage, through consultation and preparation of an Environmental Impact Assessment Report (EIAR), evaluation of the EIAR by a competent authority, the subsequent decision as to whether the project should be permitted to proceed, encompassing public response to that decision.

  • The aim is to predict environmental impacts at an early stage in project planning and design, find ways and means to reduce adverse impacts, shape projects to suit the local environment and present the predictions and options to decision-makers. Although legislation and practice vary around the world, the fundamental components of an EIA would necessarily involve the following stages:
  1. Screening
  2. Scoping
  3. Assessment and evaluation of impacts and development of alternatives
  4. Reporting the Environmental Impact Statement (EIS) or EIA report
  5. Review of the Environmental Impact Statement (EIS)
  6. Decision-making
  7. Monitoring, compliance, enforcement and environmental auditing

Source: The Hindu

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Sukhoi-30 MKI equipped with BrahMos missile

Syllabus subtopic: Achievements of Indians in science & technology; indigenization of technology and developing new technology.

Prelims and Mains focus: about the deployment and its significance for India’s presence in IOR; about the geopolitical importance of IOR

News: Adding teeth to India’s air and maritime dominance in the Indian Ocean Region (IOR), a squadron of fourth-generation fighter jets Sukhoi-30 MKI equipped with the BrahMos missile was inducted on Monday at the airforce station in Thanjavur in the Southern Air Command.

Sukhoi-BrahMos Combo

With a combat radius of nearly 1500-km without requiring a refuel, Sukhoi 30 jets have been modified to carry BrahMos air-to-surface missiles with a range of nearly 300 km, giving them the capacity to conduct long-range precision strikes.

About the squadron

  • The squadron is a resurrection of the Tigersharks 222 squadron, which was raised at Ambala in 1969 with Sukhoi Su-7 aircraft. In July 1971, the squadron was moved to Halwara and was engaged in combat with Pakistan Air Force in the 1971 war.

  • The squadron was formally inducted by Chief of Defence Staff General Bipin Rawat.

  • The resurrection of the 222 Squadron highlights the integration and jointness that is the future for our armed forces and integration of this weapon system would not have been possible but for the support of the Indian Air Force, the HAL, the DRDO and BrahMos.

Advantage for India’s presence in IOR

  • Sukhoi-30 MKI equipped with BrahMos will indeed become a game-changer for our armed forces.

  • Not only will it extensively enhance the security of our maritime domain, but the squadron can also perform tasks in support of the land forces, protecting the vulnerable areas and points and any other tasks that may be assigned to them.

Importance of IOR

  • The region comprises the ocean itself and the countries that border it. These include Australia, India, Indonesia, Bangladesh, Madagascar, Somalia, Tanzania, South Africa, the United Arab Emirates and Yemen.

  • There is an obvious sense in which the region is the future. The average age of people in the region’s countries is under 30, compared to 38 in the US and 46 in Japan. The countries bordering the Indian Ocean are home to 2.5 billion people, which is one-third of the world’s population.

  • Some 80% of the world’s maritime oil trade flows through three narrow passages of water, known as choke points, in the Indian Ocean. This includes the Strait of Hormuz – located between the Persian Gulf and the Gulf of Oman – which provides the only sea passage from the Persian Gulf to the open ocean.

  • The economies of many Indian Ocean countries are expanding rapidly as investors seek new opportunities. Bangladesh, India, Malaysia and Tanzania witnessed economic growth in excess of 5% in 2017 – well above the global average of 3.2%.

  • India is the fastest growing major economy in the world. With a population expected to become the world’s largest in the coming decades, it is also the one with the most potential.

  • Politically, the Indian Ocean is becoming a pivotal zone of strategic competition. China is investing hundreds of billions of dollars in infrastructure projects across the region as part of its One Belt One Road initiative.

  • In security terms, piracy, unregulated migration, and the continued presence of extremist groups in Somalia, Bangladesh and parts of Indonesia pose significant threats to Indian ocean countries.

Source: Indian Express

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