Tag: Financing Decarbonisation Through ‘Green Bank’

UPSC DAILY CURRENT AFFAIRS (4TH JANUARY, 2025) India Pledged Support to Maldives Amid Economic Issues Syllabus: GS2/IR Context The foreign minister of Maldives has arrived in India for a three-day visit. It is aimed at bolstering bilateral ties in key areas such as trade and investment. Maldives & its Significance Strategic Importance: The Maldives is strategically located in the Indian Ocean, and its stability and security are of interest to India. Trade Route: Situated along crucial maritime trade routes between the Gulf of Aden and the Strait of Malacca, the Maldives acts as a “toll gate” for nearly half of India’s external trade and 80% of its energy imports. Counterbalancing China: Maldives presents an opportunity for India to counterbalance China’s growing influence in the Indian Ocean, fostering regional balance of power. Brief on India – Maldives Participation in Multiple Forums: Both nations are founding members of the South Asian Association for Regional Cooperation (SAARC), the South Asian Economic Union and signatories to the South Asia Free Trade Agreement. Economic partnership: India emerged as Maldives’ largest trade partner in 2023. India is one of the biggest investors and tourism markets for the Maldives, with significant trade and infrastructure projects underway. In 2023, India is the leading source market for Maldives with a 11.8% market share. Defense and Security Cooperation: Since 1988, defence and security has been a major area of cooperation between India and Maldives. A comprehensive Action Plan for Defence was also signed in 2016 to consolidate defence partnership. Estimates suggest that almost 70% of Maldives’ defence training is done by India. Connectivity: The Male to Thilafushi Link project, popularly known as the Greater Male Connectivity Project (GMCP), is a USD 530 million infrastructure project. The project aims to connect Male to Villingili, Gulhifalhu and Thilafushi islands through a series of bridges, causeways and roads. The project is crucial for the proposed Gulhifalhu Port, and will be a major catalyst for the Maldivian economy. Challenges in Relations Domestic turmoil in the Maldives: Recent political upheavals and changes in government create uncertainty and complicate long-term cooperation projects. Chinese Influence: China’s growing economic presence in the Maldives, evidenced by investments in infrastructure projects and debt-trap diplomacy, is perceived as a challenge to India’s strategic interests in the region. Non-traditional threats: Piracy, terrorism, and drug trafficking remain concerns in the region, requiring continuous collaboration and intelligence sharing between India and the Maldives. Trade imbalance: The significant trade imbalance between India and the Maldives leads to resentment and calls for diversifying trade partnerships. Way Ahead The evolution of India-Maldives relations reflects a combination of geopolitical dynamics, changes in leadership, and shared regional interests. India is steadfast in its commitments towards Maldives and has always walked the extra mile towards building relations. By acknowledging and addressing the challenges, India and the Maldives can navigate the complexities of their relationship and build a stronger, more resilient, and mutually beneficial partnership for the future. No one can be Deprived of Property without Adequate Compensation: SC Syllabus: GS2/ Governance In News The Supreme Court’s decision underscores the significance of the Right to Property as a Constitutional right and Human right in a welfare state. Historical Context of Right to Property Initially, the right to property was protected as a Fundamental Right under Article 19(1)(f), which allowed citizens to acquire, hold, and dispose of property, and Article 31, which mandated compensation for property acquired by the state. However, tensions with land reform laws aimed at redistribution led to repeated amendments, diluting these protections. Eventually, the 44th Constitution Amendment Act of 1978 removed the right to property from the list of Fundamental Rights, introducing Article 300A in Part XII of the Constitution. Article 300A states, “No person shall be deprived of his property save by authority of law,” ensuring property can only be acquired by the state through a valid legal process, thereby making it a constitutional right rather than a fundamental one. Key Highlights of the Judgment Right to Property Under Article 300-A: No person can be deprived of their property except by authority of law. Adequate compensation must be paid in accordance with the law if property is acquired. Land Acquisition Case: The judgment stemmed from a case involving land acquisition for the Bengaluru-Mysuru Infrastructure Corridor Project (BMICP). Landowners had been deprived of their property since 2005 without adequate compensation due to delays attributed to the “lethargic attitude” of state authorities. Supreme Court’s Intervention: The court, exercising its powers under Article 142, directed that the market value of the land be determined as per the prevailing rates in April 2019, not the original acquisition year (2003). This adjustment was deemed necessary to ensure justice and to uphold the intent of Article 300-A. Timeliness in Compensation: The court emphasized the importance of prompt determination and disbursal of compensation in land acquisition cases. It highlighted the economic reality that delayed compensation undermines its value due to inflation and lost investment potential. Implications The ruling reinforces accountability for state authorities in adhering to constitutional principles and respecting property rights. It sets a precedent for determining compensation that considers delays caused by bureaucratic inefficiency and inflation, ensuring fairness to affected parties. Govt Amends Foreign Trade Policy, 2023 for Stakeholder Consultation Syllabus: GS3/ Economy In News The Directorate General of Foreign Trade (DGFT) has amended the Foreign Trade Policy, 2023 introducing a legal framework for mandatory stakeholder consultations before formulating or amending the policy. The amendment was made under the authority of the Foreign Trade (Development & Regulation) Act, 1992. About FTP 2023 Objective: Streamline processes and automate procedures to make it easier for exporters. Achieve $2 trillion in exports by 2030. Key Features: Districts as Export Hubs: Develop infrastructure (logistics, testing, connectivity) to support exports at the regional level. Expanded Export Promotion Capital Goods (EPCG) Scheme: Include major initiatives like PM MITRA (Prime Minister Mega Integrated Textile Region and Apparel Parks) under this scheme to promote capital goods exports. Digital Economy Focus: Establish E-Commerce Export Hubs to facilitate cross-border trade in the digital economy. Exporter Recognition: Recognize high-performing exporters and involve them in capacity-building initiatives. Streamlined (Special Chemicals, Organisms, Materials, Equipment and Technologies) Policy: Improve access to dual-use goods and technologies while ensuring responsible exports of controlled items. Impact of the Amendments Ease of Doing Business: The primary objective is to improve the ease of doing business in India by fostering greater participation and collaboration with stakeholders in trade policy decisions. Inclusivity: To foster inclusiveness and transparency in policymaking by engaging stakeholders while also retaining the government’s authority to address exceptional circumstances through suo moto decisions. Better Competitiveness: With initiatives like district hubs, e-commerce facilitation, and capacity building for exporters, FTP 2023 is positioned to enhance India’s global trade competitiveness, aligning with the target of $2 trillion exports by 2030. Chhattisgarh First State to Link Forest Ecosystem with Green GDP Syllabus: GS-3 Economy/Environment In News Chhattisgarh has become the first state in India to introduce a pioneering initiative linking the ecosystem services of forests to the Green Gross Domestic Product (Green GDP). What is Green GDP? Green GDP is an economic indicator that aims to measure the true economic performance of a country while considering the environmental impact of economic activity. Green GDP: Subtracts the environmental costs of economic activity from traditional GDP. Includes the value of environmental benefits, such as those provided by forests (clean air, water purification, biodiversity). Key Features of the Initiative Valuing Ecosystem Services: Quantifying benefits such as clean air (CO₂ absorption and oxygen production), water conservation (economic impact of rivers and springs), and biodiversity (ecological balance and farming support). These valuations will be incorporated into the state’s Green GDP calculations. Economic and Cultural Integration: Recognizing forests’ contributions beyond timber, including their cultural and spiritual significance, particularly for tribal communities. Promoting eco-tourism through jungle safaris and camping in the state’s national parks, boosting employment opportunities. Scientific Assessment: Employing scientists to measure and value the ecosystem services provided by forests to accurately reflect their contribution to the state’s economy. Benefits of Green GDP Recognizes the non-tangible benefits of forests, such as climate regulation and soil enrichment, often overlooked in traditional GDP calculations. Highlights the trade-offs between economic growth and environmental sustainability. Encourages the adoption of policies that minimize environmental damage and promote sustainable resource use. Helps identify sectors with the highest environmental impact for targeted interventions. Challenges of Green GDP Valuation Complexity: Assigning monetary value to non-market environmental benefits (e.g., biodiversity) is challenging. Data Gaps: Lack of reliable and comprehensive data on environmental degradation and natural resource usage. Implementation Issues: Adopting Green GDP requires significant adjustments in accounting frameworks and policymaking. Global Initiatives on Green DP Accounting– United Nations System of Environmental-Economic Accounting (SEEA): The SEEA provides a framework for integrating environmental data into national accounts.1. Tracks natural resources, environmental degradation, and ecosystem services.– Wealth Accounting and the Valuation of Ecosystem Services (WAVES): A global partnership led by the World Bank, WAVES supports countries in incorporating natural capital into national accounts.1. Focuses on forests, water, and ecosystems. Private Sector Participation in Nuclear Power Syllabus: GS3/Energy Context Nuclear Power Corporation of India Ltd (NPCIL) has invited requests for proposals (RFPs) from private players to set up Bharat Small Reactors (BSRs). About It is the first formal move by the Union government to decentralise the country’s nuclear power sector. Proposals are made for setting up 220 MW Bharat Small Reactors (BSR) for captive use. BSRs are Pressurised Heavy Water Reactors (PHWR) with an impeccable safety and excellent performance record. BSRs can provide a sustainable solution for decarbonization of hard to abate industries. Background: Union Budget for FY 2024-25 proposed partnerships with the private sector for research and developing Bharat Small Reactors (BSR), Bharat Small Modular Reactors (BSMR) as well as newer nuclear energy technologies. This announcement is aimed at India’s ambitious pursuit of the decarbonisation of energy generation and achieving 500 Gigawatts of non-fossil fuel-based energy generation in India by 2030. Nuclear Energy Nuclear power is not renewable energy but it is a zero-emission clean energy source. It generates power through fission, which is the process of splitting uranium atoms to produce energy. The heat released by fission is used to create steam that spins a turbine to generate electricity without the harmful by-products emitted by fossil fuels. Need for Private Players in Nuclear Sector Nuclear Capacity: India’s plans to increase its nuclear power capacity from the current 8,180 MW to 22,480 MW by 2031-32 and eventually 100 GW by 2047. India’s Targets: To reduce the emission intensity of its GDP by 44% by 2030 from the 2005 level. To achieve 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. Other Reasons: India is chasing nuclear energy as a source of power because it cannot reduce its emission intensity solely through renewable energy like solar, wind and hydro. Even if it does achieve its Nationally Determined Contribution (NDC) target only through renewable energy, the cost of power then would be very expensive. Governance NPCIL: India’s nuclear sector is governed by the Atomic Energy Act, 1962, under which only government-owned entities such as NPCIL can generate and supply nuclear energy. There has been no private sector involvement in India’s nuclear power sector so far. Conditions for Private Stakeholders: They have to find the land and incur the entire capex as well as opex including taxes. After completion of the plant, the asset will have to be transferred to NPCIL for operation. The power plant will be given the status of captive generating plant and the private entity will have full right on the electricity generated from the plant. The firm will also be allowed to sell the power to other users. Arguments in Favour of Private Sector Participation in Nuclear Power Improved Efficiency and Innovation: Private companies bring technological advancements, operational efficiency, and innovation, potentially reducing costs and improving safety standards. Increased Investment: Private players can attract more capital, helping to address the financial challenges of large nuclear projects. Faster Project Execution: Private entities, driven by competition and profit incentives, can complete nuclear projects faster and more effectively compared to government processes. Expertise and Global Standards: Private companies can bring global best practices, cutting-edge technology, and expertise to the nuclear industry, improving overall standards. Job Creation: The entry of private players can lead to increased employment opportunities in the nuclear sector, from construction to operations. Arguments Against Safety and Security Risks: Private players may prioritize cost-cutting over rigorous safety measures, potentially risking catastrophic accidents. Lack of Transparency: Private companies may not be as transparent as public institutions, leading to a lack of accountability in the management of sensitive nuclear technologies. National Security Concerns: Involving private entities in nuclear power generation could raise concerns about the potential for foreign ownership, control, or influence over critical national infrastructure. Limited Regulatory Control: Ensuring strict regulatory oversight of private companies might be challenging, potentially leading to lapses in compliance with safety, environmental, and operational standards. Profit Motive Over Public Welfare: Private companies may prioritize profitability over public welfare, potentially compromising on environmental protections, worker safety, and the long-term sustainability of nuclear energy. Way Ahead Clear Regulatory Framework: Establish a robust regulatory environment to ensure safety, compliance, and transparency, addressing concerns about accountability and national security. Public-Private Partnerships (PPPs): Promote partnerships where the government maintains oversight, while private players handle operations, innovation, and investment, ensuring a balance of interests. Gradual Implementation: Start with pilot projects and small-scale initiatives to test private sector involvement, ensuring risk management before large-scale implementation. Financing Decarbonisation Through ‘Green Bank’ Syllabus: GS3/Environment;Climate Change Context A detailed study by the Council on Energy, Environment and Water (CEEW) and the Natural Resources Defense Council India (NRDC) highlighted the need for a green bank in India. About Green Banks Green Banks are mission-driven institutions specifically designed to fund projects that contribute to climate change mitigation and adaptation. These are public, quasi-public, or nonprofit financing entities that leverage public and private capital to pursue goals for clean energy projects that reduce emissions. These are designed to bridge the gap between the high costs of green projects and the need for affordable financing. Need for a Green Banks in India Climate Finance Shortfall: The COP-29 to the UNFCCC highlighted a significant gap in climate finance. While developed countries pledged $300 billion annually to support developing nations, this amount is far below the $1.3 trillion demanded by the Global South. It underscores the need for developing countries like India to explore alternative financing mechanisms to bridge the gap. Higher Interest Rate: Traditional commercial banks often provide high-interest loans with short durations, which are not conducive to the long-term nature of green projects. Green Banks, on the other hand, offer lower interest rates and longer loan terms, making it easier for green projects to secure the necessary funding. Global Examples and India’s Need: Green Investment Bank of the United Kingdom and the Connecticut Green Bank in the USA have demonstrated the effectiveness of the Green Bank model. India, facing significant climate finance challenges, could greatly benefit from establishing its own Green Bank. Funding Sources for a Green Bank Governmental grants and subsidies; Proceeds from environmental taxes and cesses; Funds from international and multilateral financial institutions; Issuance of green bonds; Dedicated investment policies and incentives. Benefits of a Green Bank India’s Decarbonisation Goals: By providing affordable and accessible finance, a green bank could support a wide range of projects, from renewable energy installations to energy-efficient infrastructure and sustainable agriculture. This would help India meet its climate targets, including its commitment to achieving net-zero emissions by 2070. Affordable Financing: A Green Bank can provide low-interest, long-term loans tailored to the needs of green projects, making it easier for them to secure funding. Attracting Investments: By offering favorable financing terms, a Green Bank can attract both domestic and international investments into India’s green sector. Reducing Capital Flight: With a reliable source of affordable credit within the country, green projects can avoid seeking loans from foreign institutions, ensuring that investments remain within India. Promoting Innovation: A Green Bank can support innovative green technologies and startups, fostering a culture of sustainability and technological advancement. Key Concerns High Initial investment cost: Implementing green banking practices requires upfront investment in technology and infrastructure. Risk assessment: Assessing the environmental and social impact of potential investments can be complex and time-consuming. Regulatory environment: The regulatory framework for green banking may vary across countries, creating challenges for banks operating in multiple jurisdictions. Integration with Existing Systems: Adapting existing banking systems to incorporate green practices can be challenging and require significant adjustments. Skill Gap: A shortage of skilled professionals in green finance can hinder implementation. FACTS IN NEWS Rani Velu Nachiyar Syllabus: GS1/History In News Prime Minister Narendra Modi paid tribute to Rani Velu Nachiyar on her birth anniversary. Rani Velu Nachiyar Born in 1730, Rani Velu Nachiyar was the first queen in India to fight against British rule. Known as “Veeramangai” (brave woman) by the Tamils. Key Events in Her Life: After her husband was assassinated, she spent eight years under the protection of Hyder Ali.She prepared her army and planned to confront the British with her allies. Defeating the British: In 1780, she defeated the British with the help of her army and allies, regaining her empire. Her victory is considered an important chapter in India’s freedom struggle. Innovative Strategy: Rani Velu Nachiyar is credited with using the suicide attack strategy for the first time in history. Language Proficiency: She was proficient in French, English, and Urdu. Legacy: Rani Velu Nachiyar is a symbol of bravery, empowerment, and the courage to fight against injustice. Her life continues to inspire generations. Savitribai Phule Birth Anniversary Syllabus: GS1/ History and Personalities in news Context Prime Minister Narendra Modi paid tribute to Savitribai Phule, a pioneer in the field of education and social reform, on her birth anniversary. About the Savitribai Phule Birth: On January 3, 1831, in Naigaon village of Maharashtra’s Satara district. Marriage: In 1840, at the age of nine, she married Jyotirao Phule, who was just 13 at the time. Education: Formally recognised as India’s first female teacher. In 1848, the couple established the country’s first school for girls in Bhidewada, Pune. Balhatya Pratibandhak Griha: In 1863, Jyotiba Phule and Savitribai began Balhatya Pratibandhak Griha, India’s first home dedicated to prohibiting infanticide. She also advocated inter-caste marriages, widow remarriage, and eradication of child marriage, sati, and dowry systems, among other social issues. In 1873, the Phules set up the Satyashodhak Samaj (‘Truth-seekers’ society’), a platform open to all, irrespective of their caste, religion or class hierarchies, with the sole aim of bringing social equity. Literary works: Kavya Phule (Poetry’s Blossoms) in 1854 and Bavan Kashi Subodh Ratnakar (The Ocean of Pure Gems), in 1892. Draft Rules on Data Protection Law Syllabus: GS 2/Governance In News The Ministry of Electronics and Information Technology (MeitY) has drafted the Digital Personal Data Protection Rules, 2025 to implement the Digital Personal Data Protection Act, 2023 (DPDP Act). The DPDP Act, 2023, aims to balance individuals’ right to protect their personal data with the need for lawful processing of personal data. About Digital Personal Data Protection Rules, 2025 The draft rules follow the SARAL framework, ensuring they use simple language, provide clear contextual definitions, and include illustrations for easier understanding. These rules aim to strengthen the legal framework for the protection of digital personal data in India. Key Features of the Draft Rules: Requirements for data fiduciaries (entities processing personal data) to notify individuals. Registration and obligations for Consent Managers who handle consent-related activities. Rules for processing personal data by the government for issuing subsidies, benefits, services, etc. Requirements for reasonable security safeguards to protect personal data. Obligation to inform individuals about personal data breaches. Provisions detailing how individuals can exercise their rights regarding their personal data. Guidelines for processing data of children or persons with disabilities. Framework for establishing the Data Protection Board, including the appointment and service conditions for the Chairperson and members. Ramesh Chand Committee Syllabus: GS 3/Economy In News The Indian government announced the formation of Ramesh Chand Committee to revise the country’s Wholesale Price Index (WPI), with a new base year of 2022-23, replacing the current base year of 2011-12. About The WPI has undergone revisions in the past, with the last update occurring in 2015 when the base year was changed from 2004-05 to 2011-12. The primary objective of updating the Wholesale Price Index (WPI) is to provide a more accurate representation of inflation at the producer level. Currently, the WPI focuses solely on goods, overlooking the service sector, which accounts for more than half of India’s economic output. To address this limitation, the government plans to transition to a more inclusive Producer Price Index (PPI). This shift aims to capture a broader range of economic activity by incorporating both goods and services, ensuring a more comprehensive and precise measure of inflation. Ramesh Chand Committee The panel, headed by Niti Aayog member Ramesh Chand, will also review the methodology and composition of a new Producers’ Price Index (PPI). Purpose: The group’s task is to assess and suggest improvements to the price collection system,refine the computation methods for both indices, and develop a roadmap for transitioning from the WPI to the PPI. It is also expected to propose further enhancements for the reliability of the indices. The final report is due by June 30, 2026. India’s Share of Global Trade in Textiles Syllabus: GS3/Economy Context India will be the 6th largest exporter of Textiles & Apparel (T&A) in the world in 2023. About Share in Global Trade: India has a share of 3.9% of the global trade in textiles and apparel. Share in Exports: The share of T&A including handicrafts in India’s total exports stands at 8.21% in 2023-24. It marked a growth of 7% during April-October period of FY 2024-25. Major Destinations: USA and EU and with around 47% share in total textile and apparel exports. Human Metapneumovirus (HMPV) Syllabus: GS2/ Health and GS3/ S&T Context China is witnessing a sharp increase in cases of Human Metapneumovirus (HMPV), particularly affecting children under 14 years of age. About HMPV (Human Metapneumovirus) Nature: A respiratory virus that typically causes mild infections, resembling symptoms of the common cold. Discovery: First discovered in 2001, the HMPV belongs to the Pneumoviridae family along with respiratory syncytial virus (RSV). Transmission: Like Covid-19, HMPV is spread through respiratory droplets when an infected person coughs or sneezes. Symptoms: Cough, fever, and shortness of breath, with potential complications like bronchitis and pneumonia. Treatment: Currently, there is no vaccine or specific antiviral to treat HMPV and most people rely on over-the-counter medications to relieve fever and pain. India’s 1st ‘Coastline-Waders Bird Census’ Syllabus: GS3/Ecology and Biodiversity Context Gujarat is set to conduct the country’s first-ever census of coastal and wader birds at the Marine National Park and Sanctuary in Jamnagar. About The census will be jointly organised by the state forest department and the Bird Conservation Society of Gujarat. Waders Bird: They are also known as shorebirds or sandpipers, are a group of birds typically found in coastal habitats or wetlands. They are characterized by long legs, slender bodies, and often long bills, which they use to forage for food like insects and worms. Marine National Park: The Marine National Park and Marine Sanctuary in Gujarat is India’s first designated marine national park. Spanning the districts of Devbhoomi Dwarka, Jamnagar, and Morbi, it covers approximately 170 km of coastline and 42 islands. This protected area in the Gulf of Kutch was established to conserve marine biodiversity and mangrove ecosystems. The park is positioned along the Central Asian Flyway (CAF). It is a key migratory route for birds traveling, covering a large continental area of Eurasia between the Arctic and Indian Oceans and the associated island chains. Bird Species: Jamnagar district hosts over 300 species of local and migratory birds, including more than 50 species of wader birds. Among these are rare species like the ‘Shankhlo’ (Crab Plover) and ‘Moto Kichadiyo’ (Great Knot), which are seldom found elsewhere in the country

Tag: Financing Decarbonisation Through ‘Green Bank’

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