India daily

India daily: 16/04/2018

1. Pradhan Mantri Ujwala Yojana

Context: Pradhan Mantri Ujjwala Yojana (PMUY) was launched in the state of Telangana on the birth anniversary of Dr. B.R. Ambedkar.

About the Pradhan Mantri Ujjwala Yojana: 

Pradhan Mantri Ujjwala Yojana aims to provide LPG (liquefied petroleum gas) connections to poor households.

Who is eligible? Under the scheme, an adult woman member of a below poverty line family identified through the Socio-Economic Caste Census (SECC) is given a deposit-free LPG connection with financial assistance of Rs 1,600 per connection by the Centre.

Identification of households: Eligible households will be identified in consultation with state governments and Union territories. The scheme is being implemented by the Ministry of Petroleum and Natural Gas.

Some of the objectives of the scheme are:

  • Empowering women and protecting their health.
  • Reducing the serious health hazards associated with cooking based on fossil fuel.
  • Reducing the number of deaths in India due to unclean cooking fuel.
  • Preventing young children from significant number of acute respiratory illnesses caused due to indoor air pollution by burning the fossil fuel.

What makes LPG adoption necessary?

About 75 crore Indians, especially women and girls, are exposed to severe household air pollution (HAP) from the use of solid fuels such as biomass, dung cakes and coal for cooking. A report from the Ministry of Health & Family Welfare places HAP as the second leading risk factor contributing to India’s disease burden.

According to the World Health Organization, solid fuel use is responsible for about 13% of all mortality and morbidity in India (measured as Disability-Adjusted Life Years), and causes about 40% of all pulmonary disorders, nearly 30% of cataract incidences, and over 20% each of ischemic heart disease, lung cancer and lower respiratory infection.

Significance of the project:

PMUY has been a revolutionary initiative that has transformed the lives of more than 3.57 crore households spanning across the length and breadth of the country. The initiative is in line with Governments aim to eradicate energy poverty, thereby promoting economic empowerment.

Way ahead:

The PMUY is a bold and much-needed initiative, but it should be recognised that this is just a first step. The real test of the PMUY and its successor programmes will be in how they translate the provision of connections to sustained use of LPG or other clean fuels such as electricity or biogas. Truly smokeless kitchens can be realized only if the government follows up with measures that go beyond connections to actual usage of LPG. This may require concerted efforts cutting across Ministries beyond petroleum and natural gas and including those of health, rural development and women and child welfare.

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2. UN launches road safety trust fund

Context: UN has launched road safety trust fund aimed at spurring action to help save lives in road accidents.

About the Fund:

  • The United Nations Road Safety Trust Fund aims to accelerate progress in improving global road safety by bridging the gaps in the mobilization of resources for effective action at all levels.
  • The Fund will mobilize resources from governments, intergovernmental or non-governmental organizations, the private sector, philanthropic organizations and individuals.
  • UN Economic Commission for Europe (UNECE) will be the secretariat for the Trust Fund.
  • The Trust Fund will support efforts along the five pillars of the Global Plan for the Decade of Action for Road Safety, which include strengthened road safety management capacities, improved safety of road infrastructure and broader transport networks, enhanced safety of vehicles, improved behaviour of road users and improved post-crash care.

Significance of the fund:

  • It is estimated that every $1,500 contributed to the Fund could save one life, prevent 10 serious injuries and leverage $51,000 towards investments in road safety.
  • The United Nations Road Safety Trust Fund has the potential to galvanize our global efforts to address the road safety situation, building on the progress made and experience gained over the Decade of Action for Road Safety 2011-2020.

A global concern:

Road traffic deaths and injuries have become a serious and urgent global concern. Around 1.3 million drivers, passengers and pedestrians die each year, and up to 50 million are injured on the world’s roads.

Beyond human suffering, road traffic deaths and injuries cause significant economic losses to individuals and societies, keeping millions of people in poverty and creating an estimated $1.85 trillion burden on the global economy each year. This makes addressing road safety one of the most pressing social, economic, health and development challenges of our time.

Resolution on road safety:

The UN General Assembly also adopted a resolution on road safety, sponsored by Russia, in which it called for a host of measures to prevent road accidents and to minimising the resulting damage. One of the measures, it urged, the adoption policies and measures to implement vehicle safety regulations to ensure that all new motor vehicles meet applicable minimum regulations for the protection of occupants and other road users, with seat belts, airbags and active safety systems fitted as standard equipment.

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3. Asian premium

Context: India is planning to coordinate with China and other Asian countries to voice against the “Asian Premium” being charged by the Organisation of the Petroleum Exporting Countries (OPEC). Soon, the countries will chalk out the strategy that would result in getting better price from OPEC countries.

What is Asian premium?

Asian Premium is the extra charge being collected by OPEC countries from Asian countries when selling oil. The premium is determined in large part by the official selling prices (OSPs) set by Saudi Arabia, Iran, Iraq, and Kuwait, which supply about 15 percent of the world’s crude among them. They set differential prices against benchmarks on a monthly basis, adjusting them to account for regional variations.

Why countries, including India, are against Asian premium?

  • India, which sources 85% of its crude oil supplies from OPEC member countries, wants producers to offer discounts rather than charge a premium, as today it has become buyer’s market.
  • The direction of crude flow from West Asia has now shifted to Asia. Besides, with OPEC deciding not to reduce production, there is a tilt in the demand-supply balance.
  • Earlier, crude flow was from West Asia to North America and the pricing also depended on the market. Now, with the shale revolution, the flow has shifted to Asia.

Impacts:

If crude is received at a fair price without paying Asian Premium, gross refining margins will improve and it will result in competitively priced petroleum products.

Way ahead:

Asian Premium was historically never justified and so not justifiable in the changed market scenario where Asian countries are the major buyers. Therefore, any measure that erodes the advantage of geography for Asian countries and promotes a policy of subsidising oil traffic to distant destinations is not, and cannot be, in the interest of sustainable development.

OPEC:

  • The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference in September 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
  • Currently, the Organization has a total of 14 Member Countries.
  • OPEC had its headquarters in Geneva, Switzerland, in the first five years of its existence. This was moved to Vienna, Austria, on September 1, 1965.
  • OPEC’s objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.

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4. US places India under watch list

Context: The United States Treasury Department has put India again on the currency manipulator watchlist as the country’s foreign exchange net addition and the bilateral trade surplus with the US have breached two of the three criteria determining manipulation.

What is Treasury report all about?

The Treasury report is required by Congress to identify countries that are trying to artificially manage the value of their currency to gain a trade advantage, for example by keeping the exchange rate low to promote cheaper exports.

The US Treasury Department uses three parameters to determine a currency manipulator:Bilateral trade surplus with the US to be $20 billion, current account surplus at 3% of country’s GDP, and net purchases of foreign currency to 2% of country’s GDP over a year.

Key facts:

  • The “monitoring list” includes those “major trading partners that merit close attention to their currency practices.”
  • In addition to India, the other countries in the list are China, Germany, Japan, Korea and Switzerland.
  • Countries remain on the list for two report cycles “to help ensure that any improvement in performance versus the criteria is durable and is not due to temporary factors.”

Way ahead:

The report called for all the countries on the list to implement economic reforms to address their surpluses.

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5. FAME scheme

Context: The government has decided to extend the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) scheme by six months until 30 September 2018, or till the time the second phase of the scheme is approved by it.

About FAME India scheme:

What is it? With an aim to promote eco-friendly vehicles, the government had launched the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME-India) scheme in 2015.

Aim: The FAME India Scheme is aimed at incentivising all vehicle segments, including two-wheelers, three wheeler auto, passenger four-wheeler vehicle, light commercial vehicles and buses. The scheme covers hybrid and electric technologies like a strong hybrid, plug-in hybrid and battery electric vehicles.

Facts: FAME India – Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India – is a part of the National Electric Mobility Mission Plan. The scheme envisages Rs 795 crore support in the first two fiscals. It is being administered by the Heavy Industries Ministry.

Way ahead:

Electric vehicles (EVs) seem to be gaining in prominence as part of the renewable energy zeitgeist. However, mainstreaming electric vehicles will require an overhaul of the country’s energy and transport infrastructure. For example, EV charging stations will have to be set up on a war footing, and electricity generation will have to improve significantly even as its piggybacks on the push for solar energy. EV technology (especially the battery) will have to become much cheaper before it can perform well in a price-sensitive market like India.

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