Coal Project enhances Green cover: A case study

• Even as the notion is that Coal mining in India degrades the land, new projects of Coal India Ltd. (CIL), under the Ministry of Coal are not only reclaiming land to its original shape but also enhancing Green cover along with Coal Mining activity.

• Emphasis is to have a simultaneous backfilling of land after opencast Coal Mining operation and dense plantation thereon to maintain environmental equilibrium.
• Out of many such greenfield projects, one of the largest projects of CIL, the Jayant Opencast Coal Project in Singrauli District of Madhya Pradesh is forging ahead with a mission of looking beyond coal mining with the land restoration & enhancing green cover day by day.
• This has helped in lowering the effect of pollution substantially & has also helped in increasing Carbon offset. The project is under Northern Coalfields Ltd. (NCL), a Subsidiary of CIL.
• During a detailed review of environmental & forest clearance of the Jayant Project by Secretary (Coal), Ministry of Coal in New Delhi, the satellite data of the project presented by NCL revealed more Green cover than the pre-mining forest cover, which is an outstanding achievement for any mega Coal project operating in large leasehold area.

About Jayant OC Project (2020)

• Jayant Coal Project operates in an area of about 3200 hectares with an annual coal production capacity of 25 Million Tonnes. Mining operations in the project started way back in the year 1975-76.
• Coal production started from the year 1977-78 by deploying larger capacity Heavy Earth Moving Machines (HEMM) such as Dragline, Shovel, Dumpers etc.
• Coal produced from the project is linked to the Singrauli Super Thermal Power Station of NTPC located at Shaktinagar, Uttar Pradesh, which has a generation capacity of 2000 MW.
• Coal is being transported to the power plant through a dedicated Merry-Go-Round (MGR) system.
• In line with the Green Cover Mission, the massive plantation is being carried out every year in and around the project which includes reclaimed area & overburden (OB) dump areas with the help of Madhya Pradesh Rajya Van Vikas Nigam Limited (MPRVVNL).
• Saplings include species such as Jamun, Jungle Jalebi, Seesam, Sirus, Mahua, Subabul, Bel, Amla, Kachnar, Karanj, Neem, Amaltas, Bamboo, Bougainvillea, Cassia, Gulmohar, Khamer, Peltophorum etc.
• The pre-mining forest cover was around 1180 hectares which has now increased to the level of 1419 hectares of Green cover as per the Land Reclamation Report based on Satellite Data for the year 2020. This is about 45% of the total leasehold area of the Project. The target is to have over 2600 hectare area covered under Green cover after the closure of the mine, which will be more than double of the pre-mining stage.
• All new coal projects have a mandatory well-laid mine closure plan which apart from other activities, becomes a guiding factor for the restoration of land to its original condition after the completion of mining activity. Action on such restoration begins right from the start of the project wherein backfilling of the void by overburden becomes a major activity after mining & simultaneous plantation over the land becomes key activity for early biological restoration.

Drone Rules, 2021

Ministry of Civil Aviation (MoCA) has released the updated – Drone Rules, 2021 for public consultation. Built on a premise of trust, self-certification, and non-intrusive monitoring, The Drone Rules, 2021 will replace the UAS Rules 2021 (released on 12 March 2021).

Key takeaways from the Draft Drone Rules, 2021 include:

• Approvals abolished: unique authorisation number, unique prototype identification number, certificate of conformance, certificate of maintenance, import clearance, acceptance of existing drones, operator permits, authorisation of R&D organisation, student remote pilot licence, remote pilot instructor authorisation, drone port authorisation etc.
• The number of forms was reduced from 25 to 6.
• Fee reduced to nominal levels. No linkage with the size of the drone.
• Safety features like ‘No permission – no take-off’ (NPNT), real-time tracking beacon, geo-fencing etc. to be notified in future. A six-month lead time will be provided for compliance.
• The digital sky platform shall be developed as a business-friendly single-window online system.
• There will be a minimal human interface on the digital sky platform and most permissions will be self-generated.
• An interactive airspace map with green, yellow, and red zones will be displayed on the digital sky platform.
• The yellow zone was reduced from 45 km to 12 km from the airport perimeter.
• No flight permission is required up to 400 feet in green zones and up to 200 feet in the area between 8 and 12 km from the airport perimeter.
• No pilot licence is required for micro drones (for non-commercial use), nano drones and for R&D organisations.
• No restriction on drone operations by foreign-owned companies registered in India.
• Import of drones and drone components to be regulated by DGFT.
• No security clearance is required before any registration or licence issuance.
• No requirement for a certificate of airworthiness, unique identification number, prior permission and remote pilot licence for R&D entities.
• Coverage of drones under Drone Rules, 2021 increased from 300 kg to 500 kg. This will cover drone taxis also.
• All drone training and testing are to be carried out by an authorised drone school. DGCA shall prescribe training requirements, oversee drone schools and provide pilot licences online.
• Issuance of Certificate of Airworthiness delegated to Quality Council of India and certification entities authorised by it.
• Manufacturers may generate their drone’s unique identification number on the digital sky platform through the self-certification route.
• The easier process prescribed for transfer and deregistration of drones.
• Standard operating procedures (SOP) and training procedure manuals (TPM) will be prescribed by DGCA on the digital sky platform for self-monitoring by users. No approvals are required unless there is a significant departure from the prescribed procedures.
• The maximum penalty under Drone Rules, 2021 was reduced to INR 1 lakh. This shall, however, not apply to penalties in respect of violation of other laws.
• Drone corridors will be developed for cargo deliveries.
• A drone promotion council is to be set up to facilitate a business-friendly regulatory regime.

MSP for Agriculture crops 2021-22

• The policies of the Government of India and decisions taken in recent years towards farmers’ welfare have resulted in significant improvement in food grain production and sustained agriculture growth despite the COVID-19 pandemic.
• The Cabinet Committee on Economic Affairs (CCEA) chaired by the Hon'ble Prime Minister Shri Narendra Modi has approved the increase in the Minimum Support Prices (MSP) on 8th September 2021 for all designated Rabi crops for Rabi Marketing Season (RMS) 2022-23, when in advance of the sowing season.
• MSP is an integral component of Agriculture Price Policy and it targets to ensure support prices to farmers and affordable prices to the consumer. Based on the recommendations of the Commission for Agricultural Costs and Prices (CACP), the Government of India declares MSP after considering the views of State Governments and Central Ministries/Departments concerned for agricultural crops such as Cereal, Pulses, Oilseeds and commercial crops every year at the beginning of the sowing season. MSP is announced for the Kharif crops of Paddy, Jowar, Bajra, Ragi, Maize, Arhar, Moong, Urad, Cotton, Groundnut, Sunflower Seed , Soyabean ,Sesamum.
• The Rabi crops for which MSP is announced are Wheat, Barley, Gram, Masur, Rapeseeds& Mustard, Safflower and Toria. Apart from this, MSP is announced for Copra, De-husked Coconut, Jute and Fair Remunerative Prices (FRP) is announced for Sugarcane.
• Normally MSP for Rabi season was announced in October.Last year it was announced on 23rd September and for the year 2022-23 it was further advanced and announced on 8th September 2021.
• The factors considered by CACP for fixing MSP include cost of production, domestic and international prices, demand-supply conditions, inter-crop price parity, terms of trade between agricultural and non-agricultural sectors.
• The MSP approved for designated Rabi Crops for 2022-23 duringRabi Marketing Season is higher or equal to 1.5 times of cost of production. The expected returns to farmers over their cost of production is estimated to be highest in case of Wheat (100%) and rapeseed/mustard (100%), followed by lentil (79%) and gram (74%); barley (60%); safflower (50%).
• Procurement of agriculture produce of designated crops on MSP to ensure remunerative prices to the farmers is done in collaboration with the State Governments.
• Procurement of wheat and Paddy at MSP comes under Schemes implemented by Deptt. of Food & Public Distribution (DFPD) through centralized and de-centralized procurement mechanism. The procured Wheat and Paddy is utilized in distribution under Targeted Public Distribution System (TPDS) and other welfare schemes under National Food Security Act(NFSA).
• Procurement of pulses and oilseeds is made at MSP as per the Schemes under PM-AASHA scheme of DA&FW. The procurement of Notified Pulses are done under Price support Scheme (PSS) by the Central Nodal Agencies through State designated Agencies during harvesting season. Since 2015 onward the procurement of Pulses is also done at MSP for maintenance of National Buffer stock of Pulses under Price Stabilization Fund (PSF).
• Procurement of Coarse grains is being done as per the existing scheme of Department of Food and Public Distribution.Procurement of Cotton is done at MSP by the Cotton Corporation of India under the Scheme implemented by Ministry of Textiles. The procurement of Copra isalso being done under PSS in the Copra producing States based on the receipt of the proposal as per PSS guideline under PMAASHA.

Increased procurement under at MSP During 2020-21 :-

As against previous year procurement of 773.45 LMT,over 879 LMTs of paddy procured on MSP for ongoing season for 2020-21 benefitting about 130 Lakh farmers. Around 433.44 LMT wheat was procured for RMS 2021-22, against the last year corresponding purchase of 389.93 LMT, benefitting about 49.20 Lakh farmers.

During the cropping year 2020-21 which includes Kharif 2020-21, Rabi 2021 and Summer 2021 season, the Government through its Nodal Agencies has procured 12 LMT of pulses and oilseeds having MSP value of Rs. 6,742 Crores benefitting more than 7 lakhs farmers.

During the current year ,a quantity of 91,89,310 cotton bales valuing Rs. 26,719.51 crore has been procured from 18.86 lakhs cotton farmers.

Manifold increase in Govt. Procurement in recent years

Procurement of MSP crops has increased manifold during the recent years. Comparative statement of procurement of major crops during the 2009-10 to 2013-14 and last five years are as under:

• Procurement operations under MSP continued despite disruptions in logistic activities during the initial days of lock down in wake of COVID pandemic.
• Number of procurement centers were increased as compared to previous years to facilitate the farmers for selling their produce at the nearest procurement centre maintaining COVID protocols.
• During RMS 2021-22, a new chapter has been added in the history of procurement of foodgrains when the states of Haryana and Punjab also switched from indirect payment of MSP to direct online transfer to farmers' bank account. DBT of MSP has brought in transparency and real time monitoring of the procurement operations.
• Central Government is committed to continue the MSP operations to ensure remunerative prices to the farmers.

India US Climate Action and Finance Mobilization Dialogue (CAFMD)

• India and the United States are natural partners with shared values and our agenda encompasses all major pillars of our strategic priorities - including defence, security, energy, technology, education and healthcare
• The United States is to collaborate with India to work towards installing 450 GW of renewable energy by 2030.
• Currently, India’s installed power capacity is projected to be 476 GW by 2021-22, and is expected to rise to at least 817 GW by 2030.
• Mr. Kerry was speaking at a public function following a meeting with Union Environment Minister Bhupender Yadav at the launch of the Climate Action and Finance Mobilization Dialogue (CAFMD).
• The CAFMD is one of the two tracks of the India-U.S. Climate and Clean Energy Agenda 2030 partnership launched at the Leaders' Summit on Climate in April 2021, by Prime Minister Shri Narendra Modi and US President Mr Joseph Biden.
• Mr Kerry said Monday’s dialogue would serve as a “powerful avenue” for U.S.-India collaboration, and would be based on three pillars.

Operation Blue Freedom

• A team of eight persons with disabilities created a new world record for the “largest number of people with disabilities” to scale the world’s highest battlefield, Siachen Glacier, by scaling up to the Kumar Post at an altitude of 15,632 ft.
• The team with disabilities was trained and led by CLAW Global, a team of Special Forces veterans who had left the service due to disabilities.
• The expedition team climbed a total distance of 60 km atop the spine of the Siachen Glacier over a period of five days from September 7 to finally reach Kumar Post on September 11.
• Stating that the team ascended 4,000 ft gradually while scaling the Glacier, Major Ambathy said the route involved crossing several deep crevasses, icy glacial water streams, hard-ice stretches and undulating rocky moraines. “This not only tested the physical endurance and mental stamina, but also the ice-craft skills of the participants, in use of ice axe, crampons, ladder crossing and rope skills,” he said.
• This is the land world record expedition part of “Operation Blue Freedom Triple World Records” being undertaken by CLAW Global.
• CLAW Global was set up in January 2019 by Major Vivek Jacob (retd), a Para Special Forces officer, who had to hang up his boots following a combat skydive injury after 14 years of service in the Army, with the aim of teaching life skills to adventurers and people with disabilities.
• This pioneering expedition has brought India on the global stage as a leader in empowering Divyangjan and set a benchmark for other nations to emulate.
• This expedition is in line with Prime Minister Shri Narender Modi’s vision for Divyangjan and the Ministry of Social Justice Empowerment’s pursuit to harness the immense productive potential of people with disabilities.
• Simultaneously, it has also portrayed the skill and heart of India’s Armed Forces not only on the Battlefield but off it as well.

Monetary Policy Committee and Inflation in India

What is Inflation?

• Inflation can be defined as a calculated surge in the average prices of goods and services for a longer duration in the economy.
• It is a macro concept, wherein the effect of inflation is seen over a large basket of goods.
• The ultimate effect of inflation is that the value of money is reduced i.e., the purchasing power of money is reduced.

Types of Inflation

1) Cost Push Inflation

• It is caused by rise in the prices of inputs like raw material cost, electricity charges or wage rate (including a rise in profit margin made by the producer).
• Ex. Price rise of coal/ crude oil may cause price rise in industries which use coal.
• In India, cost-push inflation is the major supply side factor producing inflation.
• It can't be managed by monetary policy intervention by RBI. We have to augment the production of commodities or imports. Other conventional measures are providing incentives like subsidies, tax cuts, and launching production boosting programmes like NFSM.
• Other reasons:

1. Increase in price of inputs
2. Hoarding and Speculation of commodities
3. Defective Supply chain
4. Increase in indirect taxes
5. Depreciation of Currency
6. Crude oil price fluctuation
7. Defective food supply chain
8. Low growth of Agricultural sector
9. Food Inflation (growth agriculture sector has been averaging at 3.5%

2) Demand Pull Inflation

1. It is caused by increased demand or income in the economy (due to increased money supply), without adequate increase in supply of output.
2. Ex. “too much money chasing too few goods” is an instance of demand pull inflation.
3. Monetary Policy is the best way to tackle demand pull inflation. An increase in the Repo rate will decrease demand for loans. Additional taxation by the Govt and reduced public expenditure are also good to reduce demand.
4. This type of inflation is caused due to an increase in aggregate demand in the economy. Other reasons are:
   • A growing economy or increase in the supply of money – When consumers feel confident, they spend more and take on more debt. This leads to a steady increase in demand, which means higher prices.
   • Asset inflation or Increase in Forex reserves- A sudden rise in exports forces a depreciation of the currencies involved.
   • Government spending or Deficit financing by the government – When the government spends more freely, prices go up.
   • Due to fiscal stimulus
   • Increased borrowing
   • Depreciation of rupee

Other Types of Inflation

1. Disinflation: Reduction in the rate of inflation
2. Deflation: Persistent decrease in price level (negative inflation)
3. Reflation: Price level increases when the economy recovers from recession Based on the value of inflation
4. Creeping inflation – If the rate of inflation is low (upto 3%)
5. Walking/Trotting inflation – Rate of inflation is moderate (3-7%)
6. Running/Galloping inflation – Rate of inflation is high (>10%)
7. Runaway/Hyper Inflation – Rate of inflation is extreme
8. Stagflation: Inflation + Recession (Unemployment)
9. Suppressed / Repressed inflation: Aggregate demand > Aggregate supply. Here govt will not allow rising of prices.
10. Open inflation: Situation where price level rises without any price control measures by the government.
11. Core inflation: Based on those items whose prices are non-volatile.
12. Headline inflation: All commodities are covered in this.
13. Structural inflation: Due to structural problems like infrastructural bottlenecks.

Stagflation:

• Stagflation is a situation where an economy faces both high inflation and low growth (and high unemployment).
• The root cause for Stagflation is attributed to a drastic fall in consumer demand and it is possible because of the supply side issues.
• Retail Inflation: Highest in Vegetable > Pulses and Products > Meat and Fish > Egg.
• “Phillips Curve”: there is an inverse relationship between inflation and unemployment. Hence policymakers are advised to maintain a certain inflation rate to ensure that unemployment is kept to a minimum and the economy is operating at full capacity.

What causes Inflation?

• Inflation is mainly caused either by demand Pull factors or Cost Push factors. Apart from demand and supply factors, Inflation sometimes is also caused by structural bottlenecks and policies of the government and the central banks.
• Therefore, the major causes of Inflation are:
• Demand Pull Factors (when Aggregate Demand exceeds Aggregate Supply at Full employment level).
• Cost Push Factors (when Aggregate supply increases due to an increase in the cost of production while Aggregate demand remains the same).
• Structural Bottlenecks (Agriculture Prices fluctuations, Weak Infrastructure etc.)
• Monetary Policy Intervention by the Central Banks.
• Expansionary Fiscal Policy by the Government.

How to measure Inflation?

1) Consumer Price Index (CPI)

• It is a measure of change in retail prices only of goods and services. It is calculated on a monthly basis.
• It is used as an indicator of inflation, a tool for monitoring price stability and as a deflator in national accounts.
• The Dearness allowance of Govt employees and wage contracts between labour and employer is based on CPI.
• CPI is calculated by Laspeyre's index = [Total cost of a fixed basket of goods and services in the current period * 100] divided by Total cost of the same basket in the base period.
• CPI consists of services like housing, education, medical care, recreation etc.
• Presently the CPIs are:

1. CPI (IW): Industrial workers; CPI (AL): Agricultural Labourers and; CPI (RL): Rural Labourers. They are occupation specific and compiled by Labour Bureau.
2. CPI (Urban); CPI(Rural) and CPI (Combined): Have wider coverage and are compiled by CSO (now NSO). CPI for Urban Non Manual Employees was earlier computed by CSO but discontinued since 2008.

• RBI uses CPI-combined as the sole inflation measure for monetary policy.
• Price data are collected from selected towns by the Field Operations Division of NSSO and from selected villages by the Department of Posts.
• NREGA wages are currently linked with CPI (Agriculture Labour) but now Government has decided to index it to a new CPI (Rural).

1. CPI (R) is wider and covers more non food items like Insurance, Health and Education. CPI (AL) includes more food items.
2. Hence CPI (R) reflects better rural consumption basket compared to CPI (AL).
3. A living wage should include health, education and insurance besides base essentials.

Wholesale Price Index (WPI)

• It is aka Point to Point Inflation.
• WPI measures the average change in the prices of only goods (not services) at wholesale level. Base year 2011 - 12. 697 goods.
• Components and Prices tracked are:

1. Manufactured products (64%): Ex factory price.
2. Primary Articles (23%): Mandi price for Agri commodities.
3. Fuel and Power (13%): Ex mines price for minerals.

• Calculated by Office of Economic Advisor (OEA), DPIIT, Ministry of Commerce
• The main uses of WPI are the following:
  1. Check Inflation.
  2. It is used as a deflator for many sectors including GDP by CSO.
  3. WPI is also used for indexation by users in business contracts.
  4. Global investors also track WPI as one of the key macro indicators for their investment decisions.
  5. It includes manufacturing inputs and intermediate goods.
• Revision of Base Year to 2011 - 12 in 2017
  1. It is a regular exercise to capture structural changes in the economy and improve the quality and coverage of index.
  2. In 2017, the Base year was revised (7th time) from 2004 - 05 to 2011 - 12 (based on Dr. Saumitra Chaudhuri Committee) to align it with other macroeconomic indicators like GDP and IIP.
  3. It also changed the basket of commodities and assigned new weights to the commodities.
  4. WPI with Base year 2011 - 12 doesn't include taxes to remove the impact of fiscal policy.
  5. Now, WPI series is closer to Producer Price Index which reflects the change in average prices of goods & services either as they leave or enter the production process. It measures changes in the prices that producers get.

What is the difference between WPI & CPI?

1. WPI, tracks inflation at the producer level and CPI captures changes in prices levels at the consumer level.
2. Both baskets measure inflationary trends (the movement of price signals) within the broader economy, the two indices differ in which weightages are assigned to food, fuel and manufactured items.
3. WPI does not capture changes in the prices of services, which CPI does.

Headline Retail Inflation vs Core Inflation

• Headline inflation is the raw inflation figure reported through the Consumer Price Index (CPI) that is released by CSO. The headline figure is not adjusted for seasonality or for the often-volatile elements
• Core inflation removes the CPI components that can exhibit large amounts of volatility from month to month, which can cause unwanted distortion to the headline figure. The most commonly removed factors are those relating to the cost of food and energy.

Urjit Patel Committee on Monetary Policy Committee

• The expert committee was headed by Urjit R. Patel, Deputy Governor of the Reserve Bank of India.
• The committee felt that inflation should be the nominal anchor for the monetary policy framework. The nominal anchor or the target for inflation should be set at 4 per cent with a band of +/- 2 per cent around it.
• “It should be set by the RBI as its predominant objective of monetary policy in its policy statements,’’ the report said.
• The nominal anchor should be communicated without ambiguity, so as to ensure a monetary policy regime shift away from the current approach to one that is centred around the nominal anchor.
• “The nominal anchor should be defined in terms of headline CPI inflation, which closely reflects the cost of living and influences inflation expectations relative to other available metrics,’’ the committee felt.
• “This target should be set in the frame of a two-year horizon that is consistent with the need to balance the output costs of disinflation against the speed of entrenchment of credibility in policy commitment,’’ the report said.
• Since food and fuel account for more than 57 per cent of the CPI on which the direct influence of monetary policy is limited, the commitment to the nominal anchor would need to be demonstrated by timely monetary policy response to risks from second-round effects and inflation expectations in response to shocks to food and fuel, the committee pointed out.
• The committee asked the Central Government to ensure that the fiscal deficit as a ratio to GDP (gross domestic product) is brought down to 3.0 per cent by 2016-17.

• Monetary policy committee

1. The panel felt that the monetary policy decision-making should be vested with a monetary policy committee (MPC).
2. It went on to recommend that the Governor of the RBI should be the Chairman of the MPC.
3. It felt that the Deputy Governor in-charge of monetary policy could be the Vice-Chairman.
4. The Executive Director in charge of monetary policy could be its member. It could have two external members.
5. The full-time external members would have full access to information/analysis generated within the Reserve Bank. “
6. The term of office of the MPC could be three years, without prospect of renewal.
7. Each member of the MPC will have one vote with the outcome determined by majority voting, which has to be exercised without abstaining. Minutes of the proceedings of the MPC will be released with a lag of two weeks from the date of the meeting,’’ the committee said.

Monetary Policy Committee, 2015

• 1st time suggested by Y V Reddy Committee. Then Tarapore Committee (2006); Percy Mistry Committee (2007); Raghuram Rajan Committee (2009) and FSLRC Committee (2013) and Urjit Patel Committee (2013) talked about MPC.
• Monetary Policy Committee (MPC) was constituted as per Section 45ZB under the RBI Act of 1934 by the Central Government.
• RBI Governor is the head of MPC.
• There are 2 core tasks = Inflation targeting + Policy rate.
• The major four objectives of the Monetary Policy are mentioned below:
  • To stabilize the business cycle.
  • To provide reasonable price stability.
  • To provide faster economic growth.
  • Exchange Rate Stability.
• Center determines inflation target every 5 years. RBI maintains it.
• 6 members of MPC =
  • RBI Governor, Deputy Governor related to MPC, 1 RBI Board member.
  • 3 Govt nominees appointed through Selection Committee consisting of Cabinet Secretary head, RBI Governor, Secretary of Department of Economic Affairs, Ministry of Finance and 3 experts.
• Tenure is 4 years and they are not eligible for reappointment.
• Decision is binding on RBI.
• Quorum = 4 vote including RBI Governor.

What is the news?

• India’s retail inflation cooled to 5.3% in August from 5.6% in July, thanks to food price inflation falling to 3.11% from nearly 4% in July, and the effect of a high base last August.
• This marks the second month of marginal moderation in the Consumer Price Index (CPI), keeping retail inflation below the central bank’s upper tolerance threshold of 6% after hitting 6.3% in May and June this year.
• The Reserve Bank of India is expected to continue with its accommodative monetary policy stance, with the headline inflation number edging lower.
• However, economists warned that inflationary risks persist.