Context:

India is planning to build an International Container transshipment port (ICTP), as part of a mega-project at Galathea Bay in Great Nicobar Island in the Andamans.

More on News:

• The proposed Port will have ultimate capacity to handle 16 million Containers per year and in the first phase will handle above 4 million Containers. 
• The project is expected to be complete with an investment of INR 41,000 crore (USD 5 Billion) including investment from both Government and PPP concessionaire. 
• Other projects planned around Transhipment Port include Airport, Township and Gas and Solar Power Plant. 

Salient features of the Project:

• Geo-Strategic:
  • The islands are critical for maritime security because of their strategic location in the Indian Ocean Region (IOR). 
  • Better infrastructure and connectivity will help India enhance its military and naval strength in the islands.
  • It Helps India counter China’s ‘String of Pearls’ strategy due to its closeness to the ‘Strait of Malacca’ chokehold.
• Draft – Natural depth of 20m.                        
• Catchment – Potential to capture transhipment cargo from the similar international facilities in the sub-continent and Ports in the proximity including Indian Ports.
• Economic Benefits: 
  • India is the third-largest economy in the world with a 7,500 km long coastline
  • 95 per cent of the country’s trade by volume and 68 per cent by value moving through maritime transport.
  • It will save significant revenue loss, Currently, nearly 75% of India’s transhipped cargo is handled at ports outside India such as Colombo, Singapore etc
• Improved Logistics infrastructure:
  • It will reduce logistics inefficiencies for Indian trade (high logistic cost approx. 14 percent of GDP), improve country’s export competitiveness and create an opportunity for India to become a large hub for Asia-Africa, Asia-US/Europe container traffic trade.
  • Several other allied businesses viz. ship chandlery-ship supplies, ship repair, crew change facility, warehousing and bunkering also planned at this Transhipment Port.
• Other Benefits : such as forex savings, foreign direct investment, increased economic activity at other Indian Ports.
• Humanitarian assistance and Disaster Relief: India could also use these facilities for humanitarian assistance and disaster relief. 

Concerns: Conservationists have outlined many threats to the ecology — including those to endangered fauna, the feeling of 800,000 trees, and the impact on local tribes (Shompen and Nicobarese).

Way forward: Developing the Transhipment hub is a visionary step, which may serve India’s long term strategic and maritime and business interests.

Source: Business Standard

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Context:

The Swachh Bharat Mission has transformed one side of swachata, now focus on getting  latest technologies to transform Waste to Energy and Wealth in a major mission’.

More on news:

• The ‘special campaign 3.0’, third phase of the ‘Swachata’ drive, will be conducted from October 2 to 31 in all departments with a focus on cleanliness and reducing pendency in government departments.
• In 2019, The ‘Waste to Wealth’ Mission, aims to identify, test, and validate affordable decentralized technologies, adaptable to local requirements for waste management.

What is Waste to Wealth?:

• It seeks to convert wastes from environmental and economic liabilities to valuable resources that create livable jobs and provide community development opportunities.
• It includes take-back, recycling and final disposal at the end of their useful life, in a way promoting circular economy.
• Waste to Energy (WTE) is integral to waste to wealth and various technologies that convert non-recyclable waste into usable forms of energy  including heat, fuels and electricity.
• WTE can occur through a number of processes such as Incineration, Gasification, Pyrolysis, Anaerobic digestion, and landfill gas recovery. (Refer Image)

Other Major initiative

• The Ministry of New and Renewable Energy has notified the National Bioenergy Programme in November, 2022 with budgetary outlay of Rs. 1715 Crore (2021-2026) to be implemented in two phases for setting up of Bioenergy plants by providing Central financial assistance.
• The Ministry of Petroleum and Natural Gas has launched the Sustainable Alternative Towards Affordable Transportation (SATAT) initiative in October, 2018 which assures offtake of BioCNG/Compressed Biogas (CBG) after purification for sale as automotive fuels.
• Under the GOBARDHAN scheme implemented by the Department of Drinking Water and Sanitation, Ministry of Jal Shakti, a financial assistance up to Rs. 50.00 lakh per district is available for setting up of community biogas plants.
• The Ministry of Power has notified the SAMARTH Mission for promoting the blending of biomass in the existing coal powered thermal power plants.
• The Central Pollution Control Board has  notified guidelines to provide financial support for setting up of Biomass Pellet plants in various states.

Source: The Economic Times

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Context: 

The Reserve Bank of India has introduced revised guidelines for banks to categorize their investments in alignment with global standards which will be effective from April 1, 2024.

Revised  Norms:

• Investment Categories: Banks will classify their investment portfolios into three categories – 
  • Held to Maturity (HTM), 
  • Available for Sale (AFS), and 
  • Fair Value Through Profit and Loss (FVTPL).
• Held for Trading (HFT) is now a separate subcategory within FVTPL
• Documentation: Banks must decide on the investment category at the time of acquisition and properly document it.
• Reclassification Restriction: Banks cannot reclassify investments between categories without approval from their boards and the regulator.
• Daily Valuation for HFT: Securities classified under HFT within FVTPL must be fair-valued on a daily basis.
• Investment Fluctuation Reserve (IFR): Banks are required to create an IFR equal to at least 2% of the AFS and FVTPL portfolio to address yield fluctuations.
• Sale Limit for HTM: Sale of investments from the HTM category in a financial year should not exceed 5% of the opening carrying value without RBI approval.
• No Investment Reserve Account (IRA): The requirement for an Investment Reserve Account (IRA) has been dispensed with.
• Subsidiary Investments: Investments in subsidiaries, associates, and joint ventures should be held at acquisition cost, with any premium or discount amortized over the instrument’s remaining life.

Benefits Of Move:

These changes are expected to enhance financial reporting quality, improve disclosures, boost the corporate bond market, and strengthen banks’ risk management.

Source: Business Standard

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India’s Inflation Higher than Peers

Context: 

India’s peers among the largest economies in the world have broadly been seeing a declining trend in inflation in recent months.

Key Points:

• Global Inflation Trends: Germany, UK, and the US have seen declining inflation in recent months compared to the previous year.
• India’s Inflation Scenario: India’s inflation decline has been limited, aligning it closer to BRICS peers but with higher inflation rates.
  • August saw India’s inflation dip to 6.83% from 7.44% in July due to monsoon disruptions and crop damage.
• Government Action: India responded to rising prices by reducing domestic liquefied petroleum gas prices and implementing export bans on food items.
• Global Food Price Status: The UN’s Food and Agriculture Organisation reported a two-year low in global food prices in August.
  • India’s rice export restrictions contributed to a 15-year high in the FAO’s rice index.
• Comparison with Peers: India’s inflation remains higher than top developed countries and its BRICS counterparts.

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Context: 

• The Indian Prime Minister recently expressed concerns regarding the crisis and failure of global governance in multilateral institutions.

More about the news: 

• India recently emphasized the crucial role of the G20 in the reform of multilateral institutions(MI) with a particular focus on the United Nations.
• The climate vulnerable 20 group (V20) emphasized the need for reforms to the world’s international financial architecture to prevent the escalating climate crisis.
• The recently concluded meeting of the G20 working group on trade and investment focused on the important issue of WTO reform. 
• The G20 New Delhi Leaders’ Declaration endorsed the G20 Independent Review of multilateral development banks MDBs Capital Adequacy Frameworks (CAFs).

Need of the Multilateral Institutions:

• Challenges of global nature: Most of the challenges nations face today are global in nature and require global solutions. 
  • Pressing global issues such as conflicts, climate change, migration, macroeconomic instability, and cybersecurity can be solved collectively. 
• Pandemic disruptions: Disruptions such as the COVID-19 pandemic have reversed the social and economic progress that the global society made in the past couple of decades.
  • In 2020, the pandemic resulted in an additional 97 million people falling into poverty.

Emergence of multilateralism:

• The conclusion of the Cold War in the early 1990s set the stage for a flourishing era of multilateralism. 
  • European Union: In Europe, there was a swift progression toward extensive regional economic integration and growth, witnessed by the formation of the European Union. 
  • ASEAN: In Asia, the Association of Southeast Asian Nations played a pivotal role in enhancing regional economic and political collaboration. 

Fading Multilateral Order:

• Crisis of multilateralism: The recent East Asia Summit in Jakarta and the G20 summit display the irreversible crises within the established multilateral order. 
  • It is exemplified by the absence of the Russian President and Chinese President at these summits as well as their escalating conflicts with the rest of the world. 
• Rise in Global conflicts: Russia is entangled in a conflict with Western nations regarding Ukraine, while China faces disputes with several Asian countries, including India, Japan, the Philippines, Vietnam, and the United States.
• China angle: China represents a lasting challenge to multilateralism. 
  • China’s increasing economic strength and military capabilities, to its expansionist actions, steadfast backing of Russia has created significant challenges in Asia and Europe.

Challenges with multilateral institutions(MI): 

• Western Dominated : Most international institutions are primarily led and managed by Western countries. 
  • All presidents in the World Bank Group, from its inception in 1946 to 2023 have been U.S. citizens nominated or selected by the U.S. 
  • Traditionally, the United States has been a major contributor to the annual budgets of the international or regional organizations. 
  • Thus, the leadership of these institutions often aligns with the preferences of the US and its Atlantic allies.
• Failure to uphold principles of multilateralism: Developed nations sidestep or even boycott multilateral institutions in which they are either founding members or active participants.
  • Thus, multilateralism has not failed, rather it is the governments of nation-states that have fallen short in upholding the principles of multilateral cooperation.
• Non merit based selection of the president of the World Bank: There is no open merit-based transparent selection process to appoint the president.
  • The United States selects one of its citizens as the President of the World Bank, while Europe chooses a European to head the International Monetary Fund (IMF).
• Non democratic representation: The United States is the largest single shareholder in the World Bank/IMF, holding 16.5% of voting power. In contrast, India holds a 3.01% share, and China has 5.61%.
  • This raises questions about the democratic representation of the Global South in these MDBs, which India claims to represent. 
  • Nations with greater voting powers are given more weightage in deciding loan amount, grants, policies, projects and direction of the institutions.
• Rise of Protectionist policies: The rise of protectionist policies such as America First, Brexit, etc underscore the threat and crisis of multilateral institutions.

Challenges in reforming  multilateral institutions: 

• Change in current distribution of power: Any effort to reform multilateral institutions and systems inherently involves a shift in the existing power structure. 
• Changing the distribution of global power is a complex and sensitive process that can have significant consequences if not approached carefully.
• Multilateralism against emerging multiplex global order: Multilateralism appears to be in contrast with the emerging multipolar and decentralised global order.
  • This environment facilitates the creation of new groups, alliances, and coalitions among like-minded nations, complicating efforts to reform older institutions.

Way Forward: 

• Establishment of a clear narrative for multilateral reform: To promote this narrative on the global stage, G-20 should create a dedicated engagement group.
  • Current global challenges demand collaborative solutions, but it’s essential to recognize the limitations of traditional multilateral cooperation. 
  • Multilateral platforms often contend with conflicting interests and the dominance of powerful nations.
• Promotion of minilateral groupings: The G-20 should also promote minilateral groupings as a new approach to multilateralism and work on transforming them into multi-stakeholder partnerships. 
• Establishing networks of issue-specific minilaterals, especially concerning the governance of global shared resources, can help prevent the emergence of competitive coalitions leading to a fragmented world order. 
• Taking Cue from G-20: To overcome the trust, legitimacy and utility crises of multilateralism, the world requires a model, and the G-20 can be one. 

• • The G-20 became a world model for inclusivity and trust by providing membership to the African Union as a permanent member
• Decentralised Globalisation/Reformed multilateralism: More diversified and democratic global order with multiple centers of production.
  • The trend of vaccine nationalism, trend of supply chain disruptions with food and other resources moving towards wealthier nations exposes the threats from globalization.
• Developing a multilateral governance framework for plurilateral agreements: It should include key principles of non-discrimination, transparency, and inclusivity in incorporating the results of plurilateral negotiations in the WTO rulebook.

News Source: DTE

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Context:

Union Petroleum & natural gas minister outlined that Global Biofuels Alliance will work on the definition and specification of biofuels.

More on News:

• Reducing Import Dependency: With E20 (20% ethanol blending with petrol) implementation by 2025, India will save about `45,000 crore in oil imports and 63 MT of oil annually.
• Growth in Ethanol Market: As per the estimates of the Ministry of Petroleum and Natural gas, the global ethanol market was valued at $99.06 billion in 2022 and is predicted to grow at a CAGR of 5.1% by 2032 and surpass $162.12 billion by 2032.
• Further Potential: According to the International Energy Agency (IEA), there will be 3.5-5x biofuels growth potential by 2050 due to net zero targets, creating a huge opportunity for India.

About Global Biofuels Alliance:

• The GBA has been launched with nine initiating members–India, US, Brazil, Argentina, Bangladesh, Italy, Mauritius, South Africa, and the United Arab Emirates–while Canada and Singapore are observer countries. 
• GBA Members constitute major producers and consumers of biofuels. 
  • For Example: USA (52 per cent), Brazil (30 percent) and India (3 percent), contribute about 85 per cent share in production and about 81 per cent in consumption of ethanol.
• Aim: To promote the development and deployment of biofuels as a low-carbon pathway to sustainable energy.
• Significance: 
  • Bolster’s biofuels markets, 
  • Encourage the development of relevant standards, 
  • Facilitate sustainable global biofuels trade and information sharing, and 
  • Promote collaboration with international biofuels organizations.

What are Biofuels?

• Biofuel is a type of renewable energy source derived from microbial, plant, or animal materials. For Example: Ethanol, biodiesel and biogas.
• They are categorized based on their source, with each category known as a “generation.” 
• Important Biofuel categories in India: 
• Bioethanol:  Ethanol produced from biomass such as sugar containing materials, like sugarcane, sugar beet, sweet sorghum etc.
• Biodiesel:  a methyl or ethyl ester of fatty acids produced from non-edible vegetable oils, acid oil, used cooking oil or animal fat and bio-oil;
• Drop-in fuels: Any liquid fuel produced from Biomass, agri-residues, wastes such as Municipal Solid Wastes (MSW), Plastic wastes, Industrial wastes etc .
• Bio-CNG: Purified form of bio-Gas whose composition & energy potential is similar to that of fossil based natural gas and is produced from agricultural residues, animal dung, food waste, MSW and Sewage water.

Various Government Initiatives to Promote Biofuels:

• Repurpose Cooking Oil (RUCO) initiative: It is a project that plans to convert vegetable oils, animal fats or restaurant grease that has already been used in cooking into biodiesel for running diesel vehicles, or indeed any equipment that uses diesel.
• Ethanol Blended Petrol (EBP) Programme: It is implemented  throughout the country except Union Territories of Andaman Nicobar and Lakshadweep islands, wherein OMCs sell petrol blended with 10% ethanol.
  • According to the Roadmap for ethanol blending in India 2020-2025 report from NITI Aayog, India will need to increase ethanol production capacity from the expected 3.3 billion litres (in 2020–2021) to at least 10.2 billion litres (5.5 billion litres from sugarcane and 4.7 billion litres from grains) by 2025.
• National Policy on Biofuels-2018: The policy has the objective of reaching 20% ethanol-blending and 5% biodiesel-blending by the year 2030.
• Pradhan Mantri JI-VAN Yojana, 2019: It aims to create an ecosystem for setting up commercial projects and to boost Research and Development in the 2G Ethanol sector.
• Various Measures: The major interventions include:
  • administrative price mechanism for ethanol, 
  • simplifying the procurement procedures of OMCs, 
  • amending the provisions of Industries (Development & Regulation) Act, 1951 and enabling lignocellulosic route for ethanol procurement.

Benefits of Biofuels:

• Reduce Greenhouse Gases:Studies suggest that biofuels reduce greenhouse gases by up to 65 percent. Fossil fuels, when burnt, produce large amounts of greenhouse gases, i.e., carbon dioxide, in the atmosphere.
• Reducing Foreign Oil Dependency: Opting for renewable energy like biofuel will help reduce dependence on foreign oil in combination with other sustainable measures. 
  • Government is making all efforts to reduce import dependence. India’s oil and oil equivalent gas import dependence in 2014-15 and 2015-16 were 68.9% and 72.2% respectively and during April-January, 2020-21 is 77.1%.
• Sustainability: A significant benefit of using biogas or biofuel is that it’s more sustainable than its fossil fuel counterpart.
• Efficient Fuel: Biofuel is made from renewable resources and is relatively less flammable than fossil diesel. Plus, it has significantly better lubricating properties than its counterpart.
• For Example: SpiceJet flew India’s first biofuel flight, from Dehradun to Delhi.
• Lower Levels of Pollution: Since biofuels can be made from renewable resources, they cause less pollution to the planet.
• Converting waste into energy: Biofuels can be produced from a variety of waste materials, including agricultural waste, food waste, and municipal solid waste. 
  • This helps to reduce the amount of waste that goes to landfills and incinerators, and it also generates renewable energy.

Challanges:

• Rising Food Prices and Energy Efficiency Concerns: Increasing food prices and net energy loss in biofuel production makes the process of producing biofuels unsustainable.
  • For example, it takes more ethanol than gasoline to produce the same amount of energy, and critics contend that ethanol use is extremely wasteful because the production of ethanol actually creates a net energy loss while also increasing food prices. 
• Biofuels vs. Food Production: Biofuels have also become a point of contention for conservation groups, who argue that bio-crops would go to better use as a source of food rather than fuel. 
• Impacts of Biofuel Production on Land and Ecosystems: Specific concerns center around the use of large amounts of arable land that are required to produce bio-crops, leading to problems such as soil erosion, deforestation, fertilizer run-off, and salinity.
• Availability of Sources: The major source for production of bioethanol in India is from molasses, a by-product of sugarcane, whose  availability is dependent on the cane and sugar production that are cyclical in nature.
• Emissions:  When primary biofuels are combusted to create heat (as happens most commonly in developing countries), they produce greater amounts of local emissions than other forms of heating.
• Threat to Delicate ecosystems: The oils needed to produce biofuels such as biodiesels often derive from endangered habitats such as rainforests or other biodiverse locations.

Way Forward:

• Algae Alternative: To help mitigate the problem of large arable land use, In addition to using non-arable land and not requiring the use of freshwater, algae could potentially yield greater volumes of biofuels per acre than other sources.
• Harnessing the Crop Stubble: To have a long-term solution to stubble burning in northern India, notably Punjab, Haryana and Western UP, a bio-refinery could be constructed so that the same can use crop residue to produce ethanol. 
• Use of Genetic Engineering: Most countries which have been successful in promoting biofuel have undertaken genetic engineering on the crops so that the yield is maximized. 
  • For Example: Take the case of Brazil where most of its ethanol is produced from sugarcane directly for efficient extraction.
• Support for alternative feedstock for biodiesel production: While using Jatropha for biodiesel production eschews the food-security issue, it accounts for limited production. Thus, the Biofuel Policy should focus on expanding the list of feedstocks that can be sustainably used.
• Financing research and development for 2G biofuels: Faster uptake of  2G biofuels is hindered by the high costs of production and high risks, which throttle innovation. 
  • To tackle this issue, public enterprises should scale up investment in pilot projects for 2G biofuels.
  • The Pradhan Mantri JI-VAN Yojana already aims to provide INR 1,969 crores to develop 22 projects focused on 2G technologies. 

News Source: Livemint

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