28 April, 2020
95 Min Read
|GS-II||Saudi led coalition in Yemen urges Emirates backed southern separatist to honour RIYADH peace deal||International Relations|
|Yemen crises||International Relations|
|Virtual courts amidst lockdown|
|Cut in UN agency’s funding for food can push millions into starvation: Head of World Food Programme David Beasley|
|GS-III||RBI announces 50,000crore Special Liquidity Facility for Mutual Funds||Economic Issues|
|Digital India programme|
|Digital Learning Resources||Economic Issues|
|ITI makes low-cost aerosol box, face shields-Vocational Education in India||Economic Issues|
|SIPRI report: India, China among top three military spenders in 2019|
|Lockdown impact: Domestic sugar consumption||Economic Issues|
|Largest hole in the ozone layer heals itself: Is it Coronavirus effect?|
|PT Pointer||‘Proactive steps’: Egypt seeks IMF help to fight coronavirus|
|Important GS Topics||Sugar Industry in India||Human Geography|
Saudi led coalition in Yemen urges Emirates backed southern separatist to honour RIYADH peace deal
Part of: GS-II- International issue (PT-MAINS-PERSONALITY TEST)
A Saudi-led coalition involved in a years-long war in Yemen urged Emirati-backed southern separatists to honour terms of a Riyadh peace deal and return control of the port city of Aden to the country's internationally recognized government.
The statement by Saudi Arabia comes after the separatists' Southern Transitional Council again claimed sole control of Aden, a Red Sea port that serves as the seat of the internationally recognized government as Yemen's Shiite rebels, known as Houthis, hold the country's capital, Sanaa. The council's decision adds yet more complexity to the grinding war in Yemen that has pushed the Arab world's poorest nation to the brink of famine and killed over 1,00,000 people.
In its statement, Saudi urged the council to return to the terms of the November 2019 Riyadh Agreement, which ended earlier fighting between the separatists and the government forces after the council seized control of Aden just a few months earlier.
Part of: GS-II- International issue (PT-MAINS-PERSONALITY TEST)
Yemen, one of the Arab world's poorest countries, has been devastated by a civil war. Here we explain what is fuelling the fighting, and who is involved.
How did the war start?
The conflict has its roots in the failure of a political transition supposed to bring stability to Yemen following an
Arab Spring uprising that forced its longtime authoritarian president, Ali Abdullah Saleh, to hand over power to his deputy, Abdrabbuh Mansour Hadi, in 2011.
As president, Mr Hadi struggled to deal with a variety of problems, including attacks by jihadists, a separatist movement in the south, the continuing loyalty of security personnel to Saleh, as well as corruption, unemployment and food insecurity.
The Houthi movement (known formally as Ansar Allah) ,which champions Yemen's Zaidi Shia Muslim minority (with the help of ex president Saleh ), took advantage of the new president's weakness by taking control of their northern heartland of Saada province and neighbouring areas.
Disillusioned with the transition, many ordinary Yemenis - including Sunnis - supported the Houthis, and in late 2014 and early 2015 the rebels gradually took over the capital Sanaa. Then attempted to take control of the entire country, forcing Mr Hadi to flee abroad in March 2015.
Saudi Arabia interference and its coalition with eight Sunni Arab states to fight Houthi rebels (backed by ex president Saleh)
Alarmed by the rise of a group they believed to be backed militarily by regional Shia power Iran, Saudi Arabia and eight other mostly Sunni Arab states began an air campaign aimed at defeating the Houthis, ending Iranian influence in Yemen and restoring Mr Hadi's government. The coalition received logistical and intelligence support from the US, UK and France. Coalition ground troops landed in the southern port city of Aden in August 2015 and helped drive the Houthis and their allies out of much of the south.
Mr Hadi's government has established a temporary home in Aden, but it struggles to provide basic services and security and the president continues to be based in Saudi Arabia. The Houthis rebels still have control of Sanaa and north-western Yemen. They have been able to maintain a siege of the third city of Taiz and to launch regular ballistic missile and drone attacks on Saudi Arabia.
The launch of a ballistic missile towards Riyadh in November 2017 prompted the Saudi-led coalition to tighten its blockade of Yemen. It said it wanted to halt the smuggling of weapons to the rebels by Iran - an accusation Tehran denied - but the restrictions led to substantial increases in the prices of food and fuel, helping to push more people into food insecurity. The alliance between the Houthis and Ali Abdullah Saleh (Ex president) also collapsed in November 2017 following deadly clashes over control of Sanaa's biggest mosque. Houthi fighters launched an operation to take full control of the capital and Saleh was killed.
Rise of Militant group AQAP
Militants from al-Qaeda in the Arabian Peninsula (AQAP)and the local affiliate of the rival Islamic State group (IS) have taken advantage of the chaos by seizing territory in the south and carrying out deadly attacks, notably in Aden
Battle for port city Hudaydah (Pt SHOT)
In June 2018, the coalition attempted to launch an attack to capture from the Houthis , the Red Sea city of Hudaydah, whose port is the principal lifeline for almost two thirds of Yemen's population. The UN warned that the port's destruction would lead to massive loss of life due to famine.
After six months of fighting, the warring parties agreed a ceasefire at talks in Sweden. The Stockholm agreement required them to redeploy their forces from Hudaydah, establish a prisoner exchange mechanism. While hundreds of prisoners have since been released, the full redeployment of forces from Hudaydah has not yet taken place, raising fears that the Stockholm agreement will collapse and that the battle for Hudaydah will resume.
Fight among the coalition backed government and its ally Southern Transition Council
In August 2019, infighting erupted in the south between Saudi-backed government forces and an ostensibly allied southern separatist movement supported by the United Arab Emirates, the Southern Transitional Council (STC). Forces loyal to the STC, which accused Mr Hadi of mismanagement and links to Islamists, seized control of Aden and refused to allow the cabinet to return until Saudi Arabia brokered a power-sharing deal that November.
The UN hoped the agreement would clear the way for a political settlement to end the civil war, but in January 2020 there was a sudden escalation in hostilities between the Houthis and coalition-led forces, with fighting on several front lines, missile strikes and air raids.
Impact of war
Yemen is experiencing the world's worst humanitarian crisis.
1. The UN had verified the deaths of at least 7,500 civilians by September 2019, with most caused by Saudi-led coalition air strikes.
2. Thousands more civilians have died from preventable causes, including malnutrition, disease and poor health.
3. It is estimated that 85,000 children with severe acute malnutrition might have died between April 2015 and October 2018.
4. Almost 20 million people lack access to adequate healthcare
5. Almost 18 million do not have enough clean water or access to adequate sanitation.
6. The largest cholera outbreak ever recorded, which has resulted in more than 2.2 million suspected cases and 3,895 related deaths since October 2016.
7. About 80% of the population - 24 million people - need humanitarian assistance and protection.
Some 20 million people need help securing food, according to the UN. Almost 10 million of them are considered "one step away from famine".
Why should this matter for the rest of the world?
1. It also worries the West because of the threat of attacks - such as from al-Qaeda or IS affiliates - emanating from the country as it becomes more unstable.
2. The conflict is also seen as part of a regional power struggle between Shia-ruled Iran and Sunni-ruled Saudi Arabia.
3. Yemen is also strategically important because it sits on a strait linking the Red Sea with the Gulf of Aden, through which much of the world's oil shipments pass.
Source: Web/Aspire resource
What is Virtual court?
Virtual Court means a virtual magistrates' court created by video links between police custody suites and a magistrates' court together with an electronic document sharing system to which all relevant parties have access
Reasons for approving virtual court during COVID-19
Demands of Supreme Court Bar Association:
THE PROJECT ENVISAGES
Virtual courts established at Delhi:
Cut in UN agency’s funding for food can push millions into starvation: Head of World Food Programme David Beasley
Part of: GS-II- International organisation (PT-MAINS-PERSONALITY TEST)
Head of the World Food Programme(WFP) David Beasley has asserted that the Corona virus pandemic is not only affecting world's rich economies, but also impacting the economies of vulnerable and conflict-torn countries where millions of people will face starvation, if there is a cut in the United Nations agency's funding for food. He said that maintaining supply chains is critical and there are many potential obstacles - export restrictions, closed borders and ports, farms not producing and roads closed.
Earlier, Mr Beasley warned the UN Security Council that as the world deals with the COVID-19 pandemic, it is on the brink of a hunger pandemic that could lead to multiple famines of biblical proportions within a few months if immediate action is not taken. He said, 821 million people go to bed hungry every night all over the world now.
A further 135 million people are facing crisis levels of hunger or worse and a new World Food Programme analysis shows that as a result of COVID-19 an additional 130 million people could be pushed to the brink of starvation by the end of 2020.
World Food Programme
Japan has donated $69 million to the United Nations World Food Programme to provide vital aid to 28 countries in the Middle East, Africa, and Asia, with the biggest shares of the money being earmarked for Yemen and Iraq.
The objectives of the World Food Programme are:
RBI announces 50,000crore Special Liquidity Facility for Mutual Funds
Part of: GS-III- Economy-Capital markets (PT-MAINS-PERSONALITY TEST)
The Reserve Bank of India announced a Special Liquidity Facility for Mutual Funds (SLF-MF) of 50,000 crore rupees with a view to easing liquidity pressures on Mutual Funds. The RBI has stated that it remains vigilant and will take whatever steps are necessary to mitigate the economic impact of COVID-19 and preserve financial stability.
The move comes after Franklin Templeton Mutual Fund decided to wind up six debt funds that have combined assets under management of nearly ?26,000 crore on account of illiquid, low rated instruments in their portfolio last weak.
The fund house had said it decided to wind up the schemes to preserve the value at least at the current levels, as the value was getting eroded due to a combination of redemption pressures and mark-to-market losses due to lack of liquidity on account of the coronavirus impact on the markets.
“RBI move is very timely. This move will first improve the confidence; second, it can help in providing the necessary liquidity to mutual fund industry if anyone needs to avail it. With the yields dropping, one would assume banks may go down the credit curve and extend facilities,” s
“Heightened volatility in capital markets in reaction to COVID-19 has imposed liquidity strains on mutual funds (MFs), which have intensified in the wake of redemption pressures related to closure of some debt MFs and potential contagious effects therefrom. The stress is, however, confined to the high-risk debt MF segment at this stage; the larger industry remains liquid,” the central bank said.
“With excess liquidity of around ?4.85 trillion as on April 24, 2020, banks, however, continue to remain largely risk averse. We expect the liquidity of the higher rated papers to improve on the back of this facility. Accordingly, active participation from the banks will be key to the success of this scheme,”
About Mutual FUNDS and PAST news
1. The markets regulator Securities and Exchange Board of India (SEBI) has tightened norms on investments by mutual funds (MFs).
Mutual Fund: A mutual fund collects money from investors and invests the money, on their behalf, in securities (debt, equity or both). It charges a small fee for managing the money.
Liquid Funds: These are debt mutual funds that invest in securities up to a maturity of 91 days.
2. The redemption issues faced by fixed maturity plans (FMPs) of mutual funds due to their exposure towards Essel Group entities have only begun as there are nearly 80 FMP schemes with such exposure towards the corporate entity. The cumulative amount at stake is about ?1,400 crore with more than 40 schemes maturing later this year. More importantly, about 14 schemes, with an exposure of nearly ?475 crore (April 2019) , will mature this month.
How to Invest in Mutual funds?
Equity Mutual fund scheme:
Debt Mutual fund schemes:
Hybrid Mutual fund Schemes:
Mutual Fund Charges:
Securities and Exchange Board of India (SEBI)
Mutual fund redemption
Mutual fund redemption is how the investors sell their fund units. However, if there is an exit load, then the investors necessarily pay it on redeeming their units. When investors redeem their units, they earn taxable capital gains. The taxability of capital gains depends on the type of fund and the period of holding. Here, investors should mandatorily consider all the expenses that they would incur on redeeming their units.
When to exit and redeem a fund
The right time to sell or redeem mutual funds depends on investors’ financial goals. One might be invested in a mutual fund for ten years to fifteen years to purchase a house or finance their child’s wedding. In some cases, it could also be a short-term goal, such as buying a car or an appliance. Once an investor gets close to realising his/her financial goal, then he/she should consider redeeming their fund units irrespective of the state of the market.
Digital India programme
Part of: GS-III- S&T (PT-MAINS-PERSONALITY TEST)
India is amongst the top 2 countries globally, just behind China on many dimensions of digital adoption. By 2022, India’s digital economy is likely to cross $1 trillion. This was the focus at the India Digital Summit 2019, held in New Delhi. The summit deliberated on what India needs to become a trillion dollar digital economy, the challenges on the way forward as well as the threats to cybersecurity.
Digital India programme
Nine pillars of Digital India
Progress and Impact of Digital India Programme
*Common Service Center
Initiatives launched by the Government of India
India’s Digital Economy
Slow roll-out of Wi-Fi hotspots and the slow speed, in comparison to other developed nation. Most small and medium scale industry is struggling to adapt to modern technology. Entry level smartphones have limited capabilities for smooth internet access, and the outreach of the ‘smartphones’ is limited. There is an absence of enough skilled manpower in digital technology. Lack of user education and there are limited facilities to train personnel. India needs over one million cybersecurity experts to check and monitor the growing menace of digital crime.
National Digital Literacy Mission
Bharat Broadband Network Limited
The Class Central (a free online course aka MOOC aggregator from top universities like Stanford, MIT, Harvard, etc.) has released the list of best 30 online courses of 2019 out of which 6 courses are from SWAYAM.
ICT in Education:
Other Digital resources available as part of various MHRD supported programmes
ITI makes low-cost aerosol box, face shields-Vocational Education in India
The government-run Industrial Training Institute (ITI) in Odisha’s Berhampur has prepared low-cost ‘aerosol box’ and ‘face shields’ for the medical staff involved in the treatment of COVID-19 patients.
At the request of the Ganjam district administration, ITI-Berhampur successfully created cost-effective ‘aerosol box’ and ‘face shields’. The market price of an ‘aerosol box’ is ?10,000, whereas the ITI-Berhampur has made it at a cost of ?3,000. Each ‘face shield’ is sold for ?200, while its production cost at ITI-Berhampur is just ?11.
What are Industrial Training Institutes (ITIs) ?
Vocational Education in India
Standing Committee on Labour under the chairmanship of Krit Soumiya had submitted its Report on the “Industrial Training Institutes (ITIs) and Skill Development Initiative Scheme”
Vocational Education can be defined as the education that is based on occupation and employment. Vocational Education is also known as career and technical education (CTE) or technical and vocational education and training (TVET).
Vocational Training in India
Brief History of Vocational Education and training
Skill India mission
Skill India is a campaign launched by Prime Minister Narendra Modi on 15 July 2015 which aim to train over 40 crore people in India in different skills by 2022. It includes various initiatives of the government like:
Need for focus on vocational training
The study titled ‘Global Talent Crunch’ highlighted that India would have a talent surplus of around 245.3 million workers by 2030 at a time when the Asia-Pacific region itself would face a talent deficit of 47 million workers.
Issues with Vocational training
The global military expenditure rose to $1917 billion in 2019 with India and China emerging among the top three spenders, according to a report by a Swedish think tank, Stockholm International Peace Research Institute (SIPRI).
The annual report ‘Trends in World Military Expenditure, 2019’ was released by the SIPRI
Reason for rise in India’s military expenditure
cluding defence pensions, accounts for about 1.5% of the country’s GDP, the lowest in recent times.
In comparison, Pakistan’s military expenditure rose by 70% over the decade 2010–19, to reach $10.3 billion while the military burden increased from 3.4% of GDP in 2010 to 4% in 2019, says the report. Pakistan was at the 24th position in 2019 compared to 19th in 2018.
Global military spending
SIPRI is an independent international institute dedicated to research into conflict, armaments, arms control and disarmament.
Established in 1966, SIPRI provides data, analysis and recommendations, based on open sources, to policymakers, researchers, media and the interested public.
Based in Stockholm, SIPRI is regularly ranked among the most respected think tanks worldwide.
Lockdown impact: Domestic sugar consumption
Part of: GS-III- Economy-Sugar policy (PT-MAINS-PERSONALITY TEST)
According to rating agency Icra, the national lockdown due to COVID-19 pandemic has adversely impacted the sugar demand, resulting in a decline in the sugar prices to closer to minimum support price (MSP) levels of Rs 31 per kg from Rs 32.5 per kg in February 2020.
The demand for sugar has witnessed a significant decline following the nationwide lockdown and the overall adverse impact on sugar consumption would be at least one million tonne in the domestic market.
The report further said that the sugar mills are unable to fulfill their monthly sales quota allocated by the government owing to demand squeeze.
The various reasons -
These factors have consequently led to a pressure on the working capital requirements of sugar mills and thus a rise in cane dues to farmers. However, the mills exporting sugar are likely to gain on rupee depreciation to an extent. The domestic sugar mills have already contracted close to 3.5-4 million tonne for export, it said, adding that the exports are likely to resume from June-July 2020.
In Maharashtra, he said the crushing operations have been impacted due to issues on harvesting and transportation owing to labour shortage with most of the migrant workers returning to their respective states.
The Union Cabinet has cleared a proposal to create an emergency sugar reserve of 4 million tonne and approved the Fair and Remunerative Prices for sugarcane for the year 2019-20.
Price Determination of Sugarcane
Commission for Agricultural Costs and Prices (CACP)
Largest hole in the ozone layer heals itself: Is it Coronavirus effect?
Part of: GS-III- S&T-Ozone (PT-MAINS-PERSONALITY TEST)
Scientists believe the closing of the hole is because of the same polar vortex and not because of the lower pollution levels during the coronavirus lockdown.
Earlier this month, scientists reported a strong reduction of ozone concentrations over the Arctic beloved to have been caused by unusual atmospheric conditions. The hole -- first identified in March 2020 -- is now being reported to have closed.
The Copernicus Climate Change Service (C3S) and Copernicus Atmosphere Monitoring Service (CAMS) by the European Centre for Medium-Range Weather Forecasts (ECMWF) confirmed that the largest hole in the Ozone later above the Arctic has closed.
What is ozone layer
The ozone layer is a protective layer of gas in the stratosphere. It shields the planet from Sun’s harmful ultraviolet radiation, which can otherwise cause skin cancer and cataracts along with other environmental issues.
Scientists noticed the unusually strong depletion of ozone over the northern polar regions in March, which is believed to have been the largest hole in the Ozone layer. The hole could have led to a bigger threat had it moved towards the south.
Although mini ozone holes over the North Pole aren’t rare, the depletion over the Arctic this year was much larger compared to previous years. The reason for this year’s ozone hole is said to have occurred due to the polar vortex — a circling whirlpool of stratospheric winds responsible for bringing cold air to the polar. Scientists also believe that the closing of the hole is because of the same polar vortex and not because of the lower pollution levels during the coronavirus lockdown.
Ozone is a molecule that contains three atoms of oxygen. The ozone layer was discovered in 1913 by two French physicists Charles Fabry and Henri Buisson.
Ozone Hole - Causes and Measures to Mitigate
Earth s atmosphere consists of several layers: Troposphere, Stratosphere, Mesosphere, Thermosphere and Exosphere. In the stratosphere of the Earth s atmosphere, at a height of about 30 40kms ozone layer or ozone shield is present which protects Earth s surface from harmful Ultraviolet (UV) rays from the Sun. The layer contains relatively higher concentrations of ozone when compared to the other parts of the atmosphere.
At any given time, thousands of ozone molecules are created and destroyed in the atmosphere. In a way, it can be said that the UV rays have created the ozone layer since they break up Oxygen molecule into individual Oxygen atoms to recombine them into a three atom Ozone. For decades, the total amount of Ozone remained relatively stable, until the post-industrial revolution when ozone layer depletion started.
Ozone depletion is the destruction of stratospheric ozone by free radicals like chlorine, bromine when they reach the upper atmosphere. The UV radiations break down the Chlorine molecules into Chlorine atoms. These chlorine atoms combine with Oxygen atoms broken from Ozone molecules to form ClO molecules leaving fewer amounts of Oxygen atoms to form Ozone again. This process reduces the number of Ozone molecules in the stratosphere resulting in depletion of Ozone layer.
If depletion is concentrated at one place for example at the poles, it forms a hole in the ozone layer, often referred to as Ozone hole.
Reasons for more pronounced Ozone Hole at the Poles
Ozone Hole first appeared over Antarctica because of atmospheric and chemical conditions unique to the region. However, it is wrong to say that the Arctic does not have an Ozone hole. Even the Northern Hemisphere shows Ozone Hole like phenomenon but to a lesser degree when compared to that of the Southern Hemisphere.
At Antarctica, during winter months when the region receives no sunlight, the stratosphere becomes cold enough to form high-level clouds called Polar Stratospheric Clouds (PSCs). The PSCs provide an ideal catalytic surface on which the chlorine can react with the ozone, thus destroying the ozone layer. This reaction, however, requires sunlight and therefore begins only when Sun returns to Antarctica during early spring, before the PSCs begin to melt. Hence the Ozone hole is more pronounced at the poles when compared to other regions.
Causes of Ozone Depletion
The causes for ozone depletion are free radicals like chlorine and bromine which are called Ozone Depleting Substances (ODS). ODSs are found in stable organic compounds like chlorofluorocarbons (CFCs), hydrochlorofluorocarbons (HCFCs), Volatile organic compounds (VOCs), carbon tetrachloride, and methyl chloroform which are released from refrigeration, fire suppression, foam insulation, and vehicular exhaust. Natural processes like volcanic eruptions also contribute indirectly to ozone depletion by the release of aerosols.
Effects of Ozone layer Depletion
Ozone layer depletion has a number of effects on living beings and also the environment.
On living beings
The depletion of ozone layer paves the way for high energy Ultraviolet radiation to enter into the Earth s lower atmosphere which causes health effects on human beings like skin cancer (malignant melanoma) eye damage and cataract problems due to direct exposure to UV rays A weakening of the immune system Acceleration of the ageing process of the skin Difficulty in breathing, chest and throat pain
In amphibians, it affects every stage of life cycle, i.e. in the growth and development of the larvae and is said to be one of the primary reasons for declining number of amphibian species.
Ozone layer depletion leads to decrease in the ozone in the stratosphere and increase in ozone present in the lower atmosphere. Ozone in the lower atmosphere is considered to be a pollutant and a greenhouse gas as it contributes to global warming and the effect trickles down to melting polar ice caps, rising sea levels, and climate change.
Measures to mitigate Ozone depletion
Ozone depletion can be arrested by reducing the number of ozone-depleting substances in the atmosphere. This can be done by reducing the use of harmful ODSs and substituting them with other substances that do not cause ozone depletion.
The ozone layer is not something that is specific to any region or country. It hence leaves all countries of the vulnerable to the effects of depletion which means all the countries have to try to mitigate the effects collectively.
International efforts to reduce Ozone Depletion: Montreal Protocol
Montreal Protocol is an international treaty signed in 1987 after the Vienna Convention and came into force in 1989. According to this treaty, many countries of the world have agreed to phase out of ODSs.
Montreal Protocol is the first international treaty to have achieved universal ratification in the history of United Nations. It is also highly successful international arrangement, as it has phased-out more than 95% of the ODS so far as per its main mandate (CFCs) in less than 30 years of its existence.
Currently, under the Montreal Protocol, accelerated phase-out of Hydrochlorofluorocarbons (HCFCs) is underway with the target year being 2030.
Kigali Amendment to Montreal Protocol
Kigali Amendment amends the Montreal Protocol of 1987. It aims to phase out Hydrofluorocarbons (HFCs), a family of potent greenhouse gases. Though HFCs are not ozone-depleting substances, they have been brought under Montreal Protocol as they have high global warming potential and also because Montreal Protocol has been more successful that climate change agreements like Kyoto Protocol (1997) which still do not have universal ratification and face staunch opposition from developed countries like the United States.
Under Kigali Amendment, in all 197 countries, including India have agreed to a timeline to reduce the use of HFCs by roughly 85% of their baselines by 2045.
Countries under Kigali Amendment have been divided into three groups and given different timelines for phasing out of HFCs. This will be the first time that developing countries like India and China have been separated and been given different timelines. (China is in the second group while India is in the third group).
‘Proactive steps’: Egypt seeks IMF help to fight coronavirus
Egypt asked for emergency financing to support investor confidence as it suffers an economic hit from the virus.
Egypt has asked the International Monetary Fund for financial assistance to shore up investor confidence in the economy as authorities work to offset the impact of the coronavirus pandemic. Assistance involves the use of the IMF's Rapid Financing Instrument and a Stand-By Arrangement. These lending tools offer rapid and flexible funding without the strings of a full program
The emergency financing under the RFI will allow the Egyptian government to "address any immediate balance of payments needs and support the most affected sectors and vulnerable groups of people", The IMF is also working with the Egyptian government to "support its strong set of macroeconomic policies through an SBA.
Sugar Industry in India
Part of: GS-I- Geography (PT-MAINS-PERSONALITY TEST)
Sugarcane farmers are facing a payments crisis running into thousands of Crores of Rupees. In Maharashtra alone the state’s sugar mills failed to disburse the entire amount of Rs 7,450.9 crore as payment for cane to farmers as the ‘fair and remunerative price’(FRP), according to Maharashtra government’s commissionerate of sugar. Similar situation regarding delays in Uttar Pradesh led to recent farmer protest bringing in light the crisis in sugar industry.
Sugar Industry’s Location in India
Problems of Sugar Industry
Fair and Renumerative Price
State Advised Price (SAP)
The sector needs infusion of capital, but also policy measures and structural changes. Technological upgradation in age old mills especially in Uttar Pradesh and Bihar to improve efficiency in production. Major sugar producing States like Maharashtra and Karnataka have migrated to the progressive revenue-sharing formula other states should also introduce revenue-sharing formula to ensure farmers receive a share in the profits. When domestic production is likely to be in excess of domestic consumption government should encourage exports through policy changes.
Source: Web/Aspire resource
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