1. Reform Package for the Telecom Sector
UPSC Syllabus: Mains GS paper III : Economy
Sub Theme: Telecom Sector | UPSC
The Telecommunication sector is considered as a powerful tool of development and poverty reduction. It is one of the key enabler for meeting a number of Sustainable development Goals (SDGs). Mobile phones which were once considered as luxury have become necessity now.
In this regard, the Government has placed considerable emphasis on growth of internet and broadband in the country as part its Digital India campaign. The success of these initiatives and our ability to promote inclusive growth depends upon the overall vibrancy and health of Telecommunications sector. However, in recent times, the revenues of the Telecom companies have come under immense pressure and reduced their ability to undertake investment in new age technologies such as 5G.
Present Status of Telecommunication Sector
Size and Contribution: Currently, India is the world’s second-largest telecommunications market with a subscriber base of 1.16 billion. It contributes almost 8.2% of India’s GDP.
Tele density: 88% ( Urban- 156%, Rural -56%)
Higher share of Private Sector: Since the 1991 LPG reforms, the share of private sector has steadily increased to 88%.
Efficiency of Sector: India is now the global leader in monthly data consumption, with average consumption per subscriber per month increasing 146 times from 16 MB in 2014 to 9.06 GB in 2019.
Challenges affecting the Telecommunication Sector
Higher Licensing Fee: Presently, the Telecom companies are required to pay higher share of their revenue in form of various fees such as Licensing Fee (3%), Spectrum Usage Charges (3%) and Universal Service Obligation Fund (5%). This in turn affects their profit margin and reduces their ability to undertake higher investments. Cut-throat Competition: The entry of new private players such as Reliance Jio has undoubtedly benefitted the consumers in terms of reduced call and data charges. However, the stiff competition has led to price wars among telecom operators. This had an overall negative impact on the telecommunication sector in the form of reduced revenues and higher debt ( almost 8 lakh crores).
Higher NPAs of Telecom Companies: The poor financial position of Telecom companies has had a contagion impact on Banking Sector. In a way, this has created a vicious cycle wherein the Banks have been reluctant to lend loans to these loss making Telecom companies.
Broadband Connectivity: Fixed broadband penetration in India is among the lowest in the world at only 6 per cent as compared with 55 per cent in China, 70 per cent in Eurozone and 80 per cent in Japan. Limited Spectrum Availability: Presently, the government has proposed to auction spectrum in 3300-3600 Mhz bands for the roll out of 5G services in India. However, only about 175 units are available in the 3300-3600 Mhz band. The rest is under the control of ISRO and Ministry of Defence. 5G requires a minimum of 100 MHz block . Anything less, will not be attractive for Telecom operators.
Poor Connectivity: Lack of Telecom Infrastructure in Rural and Remote areas as evident in poor Tele density of 56% as compared to Urban Tele density of 156%.
Decline in revenue due to growth of Over the Top (OTT) providers: OTT providers are the entities that offer ICT services without owning or operating the network. The best examples include Skype, WhatsApp, Snapchat, Google Talk, Netflix etc. Some of these apps such as WhatsApp, Skype etc. provide options such as Call, Messaging etc. which are similar to services offered by Telecom operators leading to decline in their revenue.
Recent Judgement of Supreme Court: Recently, in 2019, the SC ruled that the Adjusted Gross Revenue (AGR) of the Telecom Operators would include both Core and Non-Core revenue. This judgement of SC has led to increase in the share of revenue which the Telecom operators are required to pay to the Government in form of various fees. The total burden on all the telecom operators due to the SC judgement is as high as around Rs 1.4 lakh crores.
Reforms in the Telecom Sector
- Moratorium on payment of dues for a period of four years
- Rationalization of AGR: Non-Core revenue will be excluded on prospective basis from the definition of AGR.
- No Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions. • Spectrum Tenure: In future Auctions, tenure of spectrum increased from 20 to 30 years • FDI in Telecom Sector:
o Present Status: 49% ( Automatic Route); Beyond 49% ( Approval Route)
o New Change: 100% FDI under Automatic Route
2. Electric Mobility- Initiatives, Challenges and Strategies
UPSC Syllabus: GS Mains III: Environment
Sub Theme: Electric Mobility | UPSC
Need to push for Electric Mobility
Climatic change: India has committed to cutting its GHG emissions intensity by 33% to 35% percent below 2005 levels by 2030
Advances in renewable energy and battery technology: Lower cost of clean, low-carbon energy with higher energy densities, faster charging and long-lasting batteries.
Rapid urbanization: According to a recent study by WHO, India is home to 14 out of 20 most polluted cities in the world. Electric vehicles (EVs) can improve that scenario by reducing local concentrations of pollutants in cities. Data capture and analysis – Mobility has undergone a digital revolution. This has created possibility of a greater utilization of existing transportation assets to move towards electric mobility.
Opportunities through Improved battery technology: Advances in battery technology have led to higher energy densities, faster charging and reduced battery degradation from charging. Energy security: EV’s will facilitate lower reliance on fossil fuel imports and at the same time reduce India’s Current account Deficit (CAD).
Lower Maintenance of Electric Vehicles due to less number of moving parts.
NITI Aayog in its recent report has highlighted that making India’s passenger mobility shared, electric and connected can cut its energy demand by 64% and carbon emissions by 37%. This roughly translates into savings of Rs 3.9 lakh crores by 2030.
Initiatives taken for Electric Mobility
National Electric Mobility Mission Plan 2020: Aims to have 6-7 Million Electric Vehicles by the end of 2020. Implemented by Ministry of Heavy Industries and Public Enterprises.
National Council for Electric Mobility: Inter-Ministerial team headed by Minister of Heavy Industries to approve Electric Mobility Plans.
National Board for Electric Mobility: Inter-Secretarial team headed by Secretary, Department of Heavy Industries to recommend Policies for adoption of Electric Vehicles.
FAME Scheme (Phase II): The Department of Heavy Industries is implementing phase 2 of the FAME Scheme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) for a period of 3 years starting from 1st April 2019.
- Objective: Target to achieve 6-7 million sales of hybrid and electric vehicles year on year from 2020 onwards
- Mandate: Demand Incentive and Charging Infrastructure
- Nature of Demand Incentive: The higher cost of Electric vehicles can act as prohibitive factor. Hence, the Government provides for upfront demand incentive on purchase of Electric Vehicles. This demand incentive leads to decrease in purchasing cost of Electric vehicle for the consumer. For example, to buy Electric Vehicle worth Rs 1.5 lakh, the customer would be required to pay only Rs 1.3 lakhs. The remaining amount of Rs 20,000 is later reimbursed by the Government to the manufacturer.
- Applicability: Applicable for all vehicles (Two-Wheelers, Three-Wheelers, Four-Wheelers, Buses etc) used for both Public and Private Transportation. However, higher preference is being given for Public Transportation vehicles. Further, incentive depends upon battery capacity of vehicles. Higher the battery capacity, higher would be the demand incentive.
Challenges in the Adoption of Electric Vehicles
In spite of these initiatives, the share of Electric vehicles in India has remained below 1%. This is quite low as compared to countries such as Norway where the share of electric vehicles is as high as 40%. Similarly, last year, China alone accounted for more than half of the global sale of Electric Vehicles. Some of the constraints and Challenges are:
Higher Dependence on Raw Materials: India does not have enough reserves of rare earth minerals such as Lithium, Cobalt etc. which are required for manufacturing batteries. Most of these minerals are imported from countries such as China.
Poor Charging Infrastructure: Once fully charged, the Electric Vehicles can run for an average maximum distance of around 250 km. Hence, unless the charging infrastructure improves, the demand for electric vehicles would remain lower.
Higher Capital costs of Electric vehicles in comparison to conventional vehicles. Lower efficiency of Electric vehicles in terms of average speed and distance travelled. Energy Insecurity: The Fossil fuels account for almost 65% of electricity needs in India. Hence, the higher demand for electricity to charge electric vehicles could lead to increased demand for fossil fuels. Lack of skilled manpower for the manufacture of Electric and hybrid vehicles.
What should be done to promote adoption of Electric Vehicles?
Revisiting FAME Scheme: India has a unique mobility pattern which is quite distinct from other countries. The vehicle fleet in India is dominated by two-wheelers which account for almost 80% of vehicles, while premium four-wheelers ( costing more than 10 lakhs) account for only 2%. Hence, incentives have to be designed keeping in mind the unique aspect of vehicle fleet in India.
However, the demand incentive under FAME scheme depends upon the battery capacity. Higher the battery capacity, higher the demand incentive. Such an incentive structure tends to provide higher incentive for premium four-wheelers as compared to two-wheelers. Further, Government’s additional requirements on two-wheelers such as higher average speed and higher travel distance upon charging has led to absence of demand incentive on purchase of large number of electric vehicles.
Battery Swapping: The batteries account for around 50% of the Electric Vehicles and thus increase their cost. Hence, people should be allowed to purchase Electric cars without batteries. Later, the vehicle owner can fit the fully charged battery from a service centre owned by a private company. As and when, the battery runs out, the vehicle owner would pay replace the existing battery with another fully-charged battery. Here, the vehicle owner would not bear the cost of entire battery, rather he would pay only for the charging. The batteries would continue to be owned by the private company operating the service centre.
Retrofitting Existing Vehicle Fleet by enabling them to act as Hybrid Vehicles (both Petrol/Diesel and Electric).
Ensuring availability of critical and strategic minerals such as Lithium, Cobalt etc by acquiring mines overseas. The setting up of Khanij Bidesh India Ltd. (KABIL) to ensure mineral security is a step in right direction.
Providing charging infrastructure: The limiting factor of batteries on driving range may be addressed by developing charging infrastructure for fast-charging of batteries.
Import Duty and Make in India: Finished electric cars should have highest import duty. However, components such as batteries, drive-trains etc. should have lower customs duty as compared to finished Electric cars.
GST rates: The GST rates should favour commercial vehicles in comparison to private vehicles.
Invest in Research and Development in new approaches and technologies such as hydrogen fuel-cells, new battery-chemistries (with higher specific energy and energy densities) etc. Appropriate guidelines have to be laid down for provide for tax exemption and utilisation of CSR Funds. Added thrust on Renewable energy projects such as Solar, Wind etc. for charging of Electric Vehicles and to ensure energy security.
Explore innovative incentives to promote Electric Vehicles such as Doing away with Road Tax and Registration charges, Free toll, free parking, dedicated parking spaces in offices and residential buildings etc.
3. China’s Strategy towards Border Disputes and India’s Options
UPSC Syllabus: Mains |GS paper II International relations
Sub Theme: India – China | UPSC
The year 2020 commemorated 70th ¬anniversary of bilateral ties between India and China. It was preceded by 2 informal summits- Wuhan Summit (2018) & Chennai Connect (2019), where high level exchanges took place between the two countries. The year 2020 was meant to be a year of celebration but the bloody showdown in Galwan have turned this year into a tragedy. China made intrusion into Galwan Valley, Hot Springs and Pangong Tso areas in Eastern Ladakh. This is seen as Chinese ‘salami slicing’ attempt to shift the Sino-India LAC further west in the disputed region.
|Salami slicing strategy of China:
Salami Slicing is a divide-and-conquer tactic used to dominate opposition territory piece by piece. These small actions cumulate over a period of time and result in strategic advantage for the aggressive country. There are 2 advantages with this strategy
✔ Such military operations are too small to result in a war. They leave a neighbouring country confused as it is not able to decide how and how much should it respond.
✔ These small military actions also help avoid international diplomatic attention China uses this strategy for its territorial expansion in the South China Sea and the Himalayan regions.
More than a year has passed since border tensions erupted between the two countries, the Chinese are yet to vacate completely.
India’ response till now:
|• India has deployed troops immediately and reinforced its military assets on the LAC to prevent deeper incursions
• Engaged in diplomatic and military-to military dialogue to deescalate tensions
|Though the deployment of troops stalled further incursions, diplomatic & military dialogue did not result in restoration of status quo.|
|• Imposed tighter limits on Chinese investment in projects such as railways, motorways, public-sector construction and telecoms
• Banning Chinese apps in India on grounds of data security
• Exemption of Chinese tech companies like Huawei & ZTE from 5G trails in India
• Protectionist measures like tighter FDI norms, Increased tariffs etc.
|It is going to have minimal Impact on China as India accounts for only around 3 % of China’s exports. China’s FDI into India is
hardly around $ 2 bn, where as , India is far too dependent on
China for vital imports in pharma and electronic industry
In this background, India can consider following options/strategies to counter China effectively • Cordial Neighbourhood: India through its neighbourhood first policy should engage more with South Asian countries. New Delhi can no longer afford to keep SAARC defunct. India cant counter China without cordial neighbours
- Net security provider in Indian Ocean:
India needs to
✔ Provide Humanitarian and distaste relief (HADR) measures in case of any natural disasters like cyclones or Man-made disasters like Oil spills in the Indian ocean ✔ Conduct joint naval exercise with IOR littoral countries and ensure piracy free passage to commercial ships
This will keep China away from Indian ocean. India’s vision of SAGAR (Security and growth for all in the region) is a right step in the direction.
Being a founding member of NAM, India has always maintained “strategic autonomy” and has never been a part of any Military alliance after its Independence. However, It is worthwhile for India to engage more closely with QUAD grouping as an Informal security architecture to ensure “Free, Open and Inclusive Indo-pacific region” which respects rules based International order
- Changing India’s stance on south China sea:
Recently, the MEA illustrated India’s intention to move away from historical “balanced” approach towards SCS disputes, towards a more “proactive” role, guided by its Act East policy and Indo-Pacific vision. India’s activities include
✔ Naval deployments
✔ Oil exploration by ONGC videsh ltd along Vietnam coast.
✔ Strategic-military partnerships with the south China sea littoral states
- Shift from One-China policy:
India has maintained One-China policy for long but it is time to adopt tougher positions on Tibet and Taiwan. If Beijing is not sensitive to India’s core interests, New Delhi too should signal its resolve to move away from old arrangements
- Integration with Global value Chain:
✔ Integration of Indian economy with Global value chain across the sectors will eventually reduce over dependency on China for Imports as well as exports
✔ Supply chain initiatives like the one launched by India, Japan and Australia will help India diversify its supply risks and reduce dependency on china
4. AUKUS Trilateral Security Partnership
UPSC Syllabus: Mains | GS paper 2 : International relations
Sub Theme: Indo – Pacific | UPSC
- A week before a meeting of Quad leaders in Washington DC, the Biden administration, announced a new trilateral security partnership for the Indo-Pacific between Australia, the U.K. and the U.S. (AUKUS).
- A trilateral grouping that was security focused, suggesting it was different from — but complementary to — arrangements such as the Quad.
- A trilateral 18-month effort to help Australia acquire nuclear-powered submarines which are quieter, more capable (than their conventional counterparts) and can be deployed for longer periods, needing to surface less frequently.
- The partnership would also involve a new architecture of meetings and engagements between the three countries and also cooperation across emerging technologies (applied AI, quantum technologies and undersea capabilities).
- Australia has felt increasing pressure from an assertive China, like other countries in the region, and has sought to strengthen its partnerships with India, the U.S. and the U.K., including through ‘plurilateral’ forums.
- Western nations have been wary of China’s infrastructure investment on Pacific islands and also criticised China’s trade sanctions against countries like Australia.
- Australia had in the past maintained good relations with China, its biggest trading partner. But the relationship has broken down in recent years amid political tensions.
Difference with Quad:
- However, as in the case of the Quad, the U.S. officials denied the partnership was a response to China.
- The leaders also made it clear that the new alliance does not and will not supersede or outrank existing arrangements in the Indo-Pacific region such as the Quad, which the US and Australia form with India and Japan, and Asean, and that it will compliment these groups and others.
5. Sputnik Light Vaccine
UPSC Syllabus: Prelims : Science & Technology
Sub Theme: Vaccine | UPSC
Earlier in the month of August 2020, Russia had developed Sputnik V Vaccines for Covid. The vaccine was named after the first Soviet space satellite. This vaccine is two shot vaccines and is presently administered to the people in Russia.
Recently, Russia has developed a variant of Sputnik V vaccine, which is known as Sputnik Light. Unlike the earlier sputnik V vaccine, which was 2 shot vaccine, the Sputnik Light is a single shot Vaccine. Being a single shot vaccine, it has number of advantages over the earlier Sputnik V vaccines. These Include: 1. Cheaper- less than $ 10.
- Double vaccination rates and reduce the pandemic
- Higher Efficacy (80%) in comparison to other 2 -shot vaccines
- Proven to be effective against all the new strains of Virus