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04-February-2025-Daily-Current-Affairs

February 4 @ 7:00 am - 11:30 pm

INDIA’S CLEAN ENERGY TRANSITION AND THE NEED FOR A CRITICAL MINERALS FRAMEWORK

TOPIC: (GS3) ECONOMY: THE HINDU

India has made significant progress in shifting to clean energy over the past decade, supported by increased budgetary allocations. However, challenges such as supply chain disruptions, import dependence, and the need for a robust critical minerals framework must be addressed for a successful transition.

Progress in Clean Energy Transition

  • India’s investment in renewable energy has grown significantly, with the budget for the Ministry of New and Renewable Energy increasing from ₹1,535 crore in FY 2015 to ₹32,626 crore in FY 2025.
  • Despite higher allocations, actual spending has often been lower than estimated, except in 2015 and 2023.
  • The PM-KUSUM scheme (2019) aimed to promote solar-powered irrigation and grid-connected solar projects on unused farmlands but has achieved limited success, with less than half a gigawatt of capacity installed.

Impact of COVID-19 on Energy Transition

  • The pandemic disrupted coal, oil, and gas supply chains, highlighting the urgency of shifting to renewable energy.
  • In response, India pledged at COP26 (2021) to generate 50% of its energy from renewables within the next five years.

Key Government Initiatives

  • The 2021 Union Budget introduced a Production-Linked Incentive (PLI) scheme of ₹18,100 crore for advanced battery storage to support grid-scale renewable energy.
  • Another PLI scheme of ₹4,500 crore for solar photovoltaic module manufacturing was later expanded to ₹19,500 crore (2022).
  • To reduce reliance on imports, particularly from China, the government imposed a 40% Basic Customs Duty (BCD) on solar modules and 25% on solar cells.
  • These duties led to higher costs, slowing down solar power installations across India.

Challenges in Renewable Energy Growth

  • Dependence on Coal: Despite renewables making up 46% of installed capacity (October 2024), 70% of India’s electricity still comes from coal.
  • Need for Battery Storage: The intermittent nature of renewable energy necessitates large-scale battery storage technology for reliability.
  • High BCD Impact: Steep customs duties increased costs, leading the government to exempt 12 critical minerals and 35 capital goods from import duties to ease the transition.

Need for a Just and Equitable Critical Minerals Framework

  • India must reduce its dependence on China for critical minerals needed for clean energy technologies.
  • A socially and environmentally responsible approach to mineral extraction is necessary to minimize ecological damage and community displacement.
  • Equitable distribution of critical minerals is essential to ensure fair access for all stakeholders.
  • With the U.S. stepping back from global leadership, India has an opportunity to lead in shaping a sustainable critical minerals policy.

Conclusion

India’s energy transition must balance growth with sustainability by securing essential minerals, promoting domestic manufacturing, and ensuring fair and responsible resource utilization.

Practice Question:

  1. Consider the following statements regarding Critical Minerals:
  1. Critical minerals are those that are essential for economic development and national security but have a high risk of supply chain disruption.
  2. India is self-sufficient in critical minerals and does not rely on imports for its energy transition needs.
  3. Lithium, cobalt, and rare earth elements are considered critical minerals due to their importance in battery technology and clean energy.
  4. The KABIL initiative is a government effort to secure critical mineral supplies for India.

Which of the statements given above are correct?

  1. 1 and 3 only
  2. 2 and 4 only
  3. 1, 3, and 4 only
  4. 1, 2, 3, and 4

Answer: C

Explanation:

  • Critical minerals are essential for modern technology, defense, and clean energy but have a high risk of supply chain disruption.
  • India is not self-sufficient in critical minerals and depends on imports for several key materials like lithium and cobalt.
  • Lithium, cobalt, and rare earth elements are critical for electric vehicle batteries, electronics, and renewable energy.
  • The KABIL (Khanij Bidesh India Limited) initiative was launched to secure critical mineral supplies through international partnerships.

JOBS NEEDED FOR ‘VIKSIT BHARAT’

TOPIC: (GS3) ECONOMY: THE HINDU

To achieve the goal of a developed India (Viksit Bharat), the country must focus on creating jobs that align with changing economic and technological needs. This includes climate-resilient, AI-resilient, and aspiration-driven employment opportunities.

Climate-Resilient Jobs

  • Climate change has significantly impacted India, leading to economic losses and job insecurity.
  • The government should promote employment in climate adaptation and green energy sectors.

Suggestions:

  • Encourage electric mobility by providing state-supported e-rickshaws in villages, creating jobs for women and enhancing last-mile connectivity.
  • Increase investment in compressed biogas plants to meet set targets and generate employment.
  • Expand decentralized and rooftop solar projects, as they are more labor-intensive and create numerous jobs.

AI-Resilient Jobs

  • The rise of Artificial Intelligence (AI) threatens many traditional jobs, especially in the IT and service sectors.
  • India needs to prioritize human-centric jobs that emphasize creativity and skills beyond automation.

Suggestions:

  • Increase funding in education and healthcare to address shortages in teachers and healthcare workers.
  • Support rural artisans, farmers, and small businesses by improving their market linkages through digital platforms.
  • Invest in training programs that equip workers with skills to complement AI rather than be replaced by it.

Aspiration-Centric Jobs

  • Rural youth often struggle with job insecurity due to inadequate education and limited opportunities.
  • There is a need to align job creation with the aspirations of young Indians through infrastructure development and value-addition industries.

Suggestions:

  • Build integrated pack-houses for agricultural products to reduce wastage and create millions of jobs.
  • Promote local manufacturing of agricultural inputs and encourage technology-driven rural entrepreneurship.
  • Reduce edible oil import dependence by supporting the National Mission on Edible Oils – Oilseeds, boosting domestic production and employment.

Conclusion

While short-term economic policies can boost consumer spending, India must focus on long-term reforms that create sustainable jobs. Investing in climate resilience, AI adaptability, and aspirational job opportunities will be key to achieving a developed India.

U.S. WITHDRAWAL FROM WHO: CAUSES AND EFFECTS

TOPIC: (GS2) INTERNATIONAL RELATIONS: THE HINDU

The U.S. has decided to withdraw from the World Health Organization (WHO), citing concerns over its alleged bias towards China and its handling of the COVID-19 pandemic. This decision is expected to impact global health initiatives due to the U.S.’s significant financial contributions to WHO.

Reasons for U.S. Withdrawal

Alleged Bias Towards China

  • Former President Donald Trump accused WHO of favouring China, particularly in its response to the COVID-19 crisis.
  • He had previously attempted to withdraw from WHO in 2020, but the Biden administration later reversed the decision.

Growing Public Distrust in WHO

  • Public sentiment towards WHO has declined in the U.S., with surveys indicating that many Americans believe the country gains little from its membership.
  • Republican supporters are less likely to see benefits in WHO participation compared to Democrats.

Political Considerations

  • The decision aligns with Trump’s stance on international organizations, focusing on domestic interests over global cooperation.
  • Republican voters, especially conservative Republicans, strongly favor reducing U.S. involvement in WHO.

Impact of U.S. Withdrawal

Financial Consequences for WHO

  • The U.S. has been the largest donor, providing nearly 15% of WHO’s total funding.
  • Funding dropped temporarily in 2020-21 but returned to normal levels in subsequent years.
  • With U.S. contributions halted, WHO faces a major financial setback.

Challenges in Filling the Funding Gap

  • No other country contributes more than 5% of WHO’s total budget.
  • Major donors like the Bill and Melinda Gates Foundation (12.9%), GAVI Alliance (9.91%), and European Commission (8.06%) may struggle to compensate for the loss.
  • China’s contribution remains at 3%, limiting its role in covering the financial void.

Impact on Global Health Programs

  • Improving healthcare access (26%) – Enhancing medical services in underprivileged regions.
  • Emergency response (21%) – Supporting rapid intervention during health crises.
  • Polio eradication (20%) – Helping eliminate the disease worldwide.
  • Pandemic prevention (10%) – Strengthening global preparedness against future outbreaks.
  • The funding cut could slow down these efforts, affecting millions globally.

Disruptions in U.S.-WHO Collaborations

  • S. personnel involved in WHO projects will be recalled, impacting global health research.
  • The U.S. has the highest number of WHO collaboration canters (79), surpassing India and China.
  • This could hinder ongoing research and medical advancements.

Conclusion

The U.S. withdrawal from WHO raises concerns about the future of global health initiatives and pandemic preparedness. The funding gap left by the U.S. will be difficult to fill, and the decision may weaken international health cooperation.

Practice Question:

  1. With reference to the World Health Organization (WHO), consider the following statements:
  1. The WHO is a specialized agency of the United Nations responsible for global public health.
  2. The WHO was established in 1945, following the end of World War II.
  3. India is a founding member of the WHO.
  4. The World Health Assembly (WHA) is the decision-making body of the WHO.

Which of the statements given above are correct?

  1. 1 and 3 only
  2. 2 and 4 only
  3. 1, 3, and 4 only
  4. 1, 2, 3, and 4

Answer: C

Explanation:

  • The WHO is a specialized agency of the UN that focuses on international public health.
  • The WHO was established in 1948, not 1945.
  • India is one of the founding members of the WHO.
  • The World Health Assembly (WHA) serves as the decision-making body of the WHO, where all member states participate.

DECLINE OF DELHI’S GENDER BUDGET AND ITS IMPACT

TOPIC: (GS2) INDIAN POLITY: THE HINDU

The gender budget in Delhi aims to support women’s empowerment through education, health, and economic development. However, a shift in spending towards cash transfers and freebies has led to a decline in education and skill development funding, affecting long-term progress.

Gender Budget Trends in Delhi

  • Over the past decade, Delhi’s overall budget has significantly increased from ₹271 billion to ₹760 billion.
  • The gender budget has grown sevenfold, from ₹10 billion in 2011-12 to ₹71 billion in 2024-25.
  • While financial aid to women is essential, prioritizing education and health is equally important for sustainable development.

Decline in Education Spending

  • The budget for women’s education rose from ₹2 billion in 2011-12 to ₹18 billion in 2024-25 but peaked at ₹24 billion in 2017-18.
  • Since 2017-18, the allocation for women’s education has been declining, with a sharp 9% drop in the last year alone.
  • The share of education in the gender budget fell from 54% in 2017-18 to 27% in 2024-25, reflecting a shift towards direct cash benefits.

According to the Periodic Labour Force Survey (PLFS) 2023-24:

  • Delhi’s female labour force participation is 21%, the lowest in India, compared to the national average of 45.2%.
  • Most women in Delhi work in low-paying jobs such as domestic help, while men dominate higher-paying roles like shopkeepers and sales professionals.
  • The gender gap in labour force participation in Delhi stands at 51.6 percentage points.

Need for Technical and Professional Training

  • Women are concentrated in traditional fields like teaching and healthcare due to limited technical education opportunities.
  • Only 3.8% of women are in high-skilled jobs such as technicians and associate professionals, compared to 10.34% of men.
  • Promoting technical and professional courses for women can help bridge gender gaps across various industries.

Way Forward

  • While cash transfers offer short-term relief, long-term empowerment depends on quality education and skill development.
  • Increasing investment in women’s education and training will help improve job opportunities, wage equality, and leadership representation.
  • A well-planned gender budget should focus on sustainable development rather than short-term electoral gains.

INDIA’S FUEL ETHANOL PRODUCTION AND THE ROLE OF MAIZE

TOPIC: (GS3) INDIAN ECONOMY: THE HINDU

India is set to achieve 20% ethanol blending in petrol by the next two months, ahead of schedule. This requires the production of about 1,100 crore litres of fuel ethanol annually, raising questions about the country’s ethanol production capacity.

Sources of Fuel Ethanol

  • Sugar and high-grade molasses
  • Food Corporation of India (FCI) rice
  • Broken rice
  • Maize
  • India’s ethanol distillery capacity has increased to 1,600 crore litres due to government policies and incentives.

Contribution of Sugar

  • Sugar sector’s role: Around 400 crore litres of ethanol will be sourced from sugar mills.
  • Sugar production outlook: In October 2024, India had 80 lakh tonnes of sugar stocks. For the upcoming year, India is expected to produce 315 lakh tonnes of sugar. 40 lakh tonnes of sugar will be allocated for ethanol production.
  • Ethanol for non-fuel purposes will be produced from C Heavy molasses, a byproduct of sugar production.

Use of FCI Rice

  • The government reduced the price of FCI rice from ₹28 to ₹22.5 per kg to boost ethanol production.
  • An estimated 110 crore litres of ethanol will be produced from FCI rice in the ethanol year 2024-25.

Growing Role of Maize in Ethanol Production

  • 400 crore litres of fuel ethanol will be derived from maize.
  • Before 2020, maize was not a major source of ethanol in India.
  • Sugar-based distilleries have adapted to process maize as an alternative feedstock during the off-season.

Rising Maize Production and Imports

  • India’s maize production is mainly used for:
    • Poultry feed
    • Livestock feed
    • Starch industry
    • Human consumption (about 10%)
  • Due to restrictions on sugar-based ethanol, maize imports surged from April 2024, leading to:
  • ₹100 crore worth of maize imports from April to June 2024. Total maize imports valued at $188 million from April to November 2024.

Boost in Domestic Maize Cultivation

  • Major maize-producing states: Karnataka, Madhya Pradesh, Maharashtra, Andhra Pradesh, Rajasthan, Bihar, Uttar Pradesh.
  • Expected maize output for 2024-25: 42 million tonnes, with 9 million tonnes allocated for ethanol.
  • Since 2020-21, maize production has increased by 6 million tonnes to support ethanol needs.
  • Farmers are shifting towards maize cultivation as ethanol production offers better financial returns.

Economic and Environmental Impact

  • Ethanol production reduces oil imports, saving ₹6,000 crore annually.
  • India’s total oil import bill is ₹10.5 lakh crore per year.
  • The byproduct Distiller’s Dried Grains with Solubles (DDGS) can be used as poultry feed, reducing market disruption.

Conclusion

India’s ethanol production strategy is moving towards a balanced approach by incorporating maize alongside traditional sugar-based ethanol. While ethanol blending helps reduce fuel imports, its long-term sustainability depends on ensuring that foodgrain production is not negatively affected.

Practice Question:

  1. With reference to ethanol production in India, consider the following statements:
  1. Ethanol production in India primarily uses sugarcane as the feedstock.
  2. The Government of India has set a target to achieve 20% blending of ethanol with petrol by 2025.
  3. Ethanol-blended petrol (EBP) helps in reducing the carbon footprint by decreasing carbon emissions from vehicles.
  4. The National Biofuels Policy aims to promote the use of ethanol from food grains to achieve the blending targets.

Which of the statements given above are correct?

  1. 1, 2, and 3 only
  2. 2 and 4 only
  3. 1, 3, and 4 only
  4. 1, 2, 3, and 4

Answer: A

Explanation:

  • Ethanol in India is primarily produced from sugarcane and its by-products like molasses.
  • The Government of India has set a target to achieve 20% ethanol blending in petrol by 2025 under the National Biofuels Policy.
  • Ethanol-blended petrol (EBP) helps reduce carbon emissions and environmental pollution from vehicles.
  • The policy encourages the use of non-food grains (like corn, barley, and agricultural residues) for ethanol production to avoid conflict with food security.

IMPACT OF ZERO TAX UP TO ₹12 LAKH ON FINANCE COMPANIES

TOPIC: (GS3) INDIAN ECONOMY: THE HINDU

The Union Budget 2025 has proposed making income up to ₹12 lakh tax-free, leading to increased disposable income. This has resulted in a surge in finance company stocks due to expectations of higher consumer spending and borrowing.

Reasons for the Rise in Finance Company Stocks

  • Following the budget announcement, shares of major finance companies such as Bajaj Finance, L&T Finance, and Shriram Finance saw a significant increase.
  • The expectation of higher consumer spending and borrowing has fueled investor confidence in these stocks.

How Will the Tax Changes Benefit Consumers?

  • The increase in the tax rebate limit from ₹7 lakh to ₹12 lakh will result in tax savings ranging from ₹25,000 to ₹1.1 lakh for around 1.75 crore taxpayers.
  • These savings will enhance disposable income, allowing individuals to increase their spending on goods such as automobiles, home appliances, and electronics.
  • The government is expected to forego around ₹1 lakh crore in tax revenue, which could stimulate demand in the economy.

How Will Finance Companies Benefit?

  • Consumers are expected to use their tax savings to fund purchases through no-cost EMIs offered by finance companies.
  • Increased borrowing for consumer durables, automobiles, and electronics will boost the loan portfolios of these companies.
  • The rise in leverage (borrowing capacity) of individuals will enhance the profitability of finance companies.

Multiplier Effect on the Economy

  • The ₹1 lakh crore in tax savings could generate a larger economic impact as individuals use loans to buy higher-value goods.
  • If a person saves ₹8,000 per month in taxes, they may be able to take loans worth 10 times that amount to buy high-value products.
  • This increased spending can stimulate overall economic growth by boosting demand for goods and services.

Conclusion

The increase in the tax-free income limit is expected to enhance consumer spending and credit demand, benefiting finance companies. The resulting economic activity may contribute to overall economic growth, provided the spending remains within the domestic economy.

EXTRA-LONG STAPLE (ELS) COTTON IN INDIA

TOPIC: (GS3) AGRICULTURE: INDIAN EXPRESS

ELS cotton is a high-quality variety with longer fibre length, used to make premium fabrics. Despite its benefits, India cultivates very little ELS cotton due to lower yields and market challenges.

What is ELS Cotton?

  • Cotton is classified based on fibre length: short, medium, long, and extra-long staple (ELS).
  • ELS cotton has fibres longer than 30 mm, making it stronger, softer, and more durable.
  • It mainly belongs to the species Gossypium barbadense, also known as Pima or Egyptian cotton.
  • Major producers include China, Egypt, Australia, and Peru.
  • In India, it is grown in parts of Maharashtra and Tamil Nadu in small quantities.

Why is ELS Cotton Important?

  • Produces high-quality fabric preferred for premium textiles.
  • Mixed with regular cotton to enhance fabric quality.
  • India imports over 90% of its ELS cotton needs, with annual imports of 20-25 lakh bales.

Why is ELS Cotton Not Grown in India?

  • Lower Yields: ELS cotton yields 7-8 quintals per acre, while medium staple cotton yields 10-12 quintals per acre. Countries like Brazil (20 quintals per acre) and China (15 quintals per acre) have much higher productivity.
  • Price & MSP Issues: MSP for medium staple cotton (2024-25): ₹7,121 per quintal. MSP for long staple cotton: ₹7,521 per quintal. Despite being superior in quality, ELS cotton does not fetch significantly higher prices.
  • Marketing Challenges: Farmers struggle to find buyers willing to pay premium prices. Lack of strong market linkages discourages cultivation.
  • Pest & Weed Management Issues: Farmers demand genetically modified (GM) cotton like HtBT cotton, which is currently banned in India. GM varieties can improve pest resistance and make weed management easier.

How Can the Cotton Mission Help?

  • Improving Productivity: The government aims to use advanced science & technology to improve cotton farming. Better seeds, irrigation, and agronomic advice can help boost ELS cotton yields.
  • Technology & Genetic Modification: If approved, GM cotton can improve weed and pest resistance. Countries like Brazil and China have benefitted from GM cotton adoption.
  • Enhancing Market Access: Strengthening supply chains and market linkages can help farmers get better prices. Incentives for ELS cotton can encourage more farmers to adopt it.

Conclusion

ELS cotton has great potential for India’s textile industry, but low yields and poor market access limit its production. With better technology, price support, and market reforms, India can increase its ELS cotton cultivation and reduce imports.

PRADHAN MANTRI SHRAM YOGI MAANDHAN YOJANA (PM-SYM)

TOPIC: (GS2) INDIAN POLITY: PIB

The Pradhan Mantri Shram Yogi Maandhan Yojana (PM-SYM) is a government-backed pension scheme aimed at providing social security and financial stability to unorganized workers after retirement. The scheme has received a 37% increase in budget allocation for the 2025-26 financial year to expand its benefits.

About PM-SYM:

  • A Central Sector Scheme under the Ministry of Labour and Employment.
  • Aims to provide old-age protection and pension benefits to workers in the unorganized sector.
  • Implemented by LIC (Life Insurance Corporation of India) and CSC e-Governance Services.
  • LIC manages the pension funds and ensures timely pension payouts.
  • The collected funds are invested as per government-approved policies.

Eligibility Criteria:

  • Must be an Indian citizen.
  • Open to unorganized workers such as street vendors, construction workers, farmers, rickshaw pullers, handloom workers, carpenters, and fishermen.
  • Age limit: 18 to 40 years.
  • Monthly income should be below ₹15,000.
  • Should not be a member of EPFO, ESIC, or NPS.

Voluntary & Contributory Pension Scheme:

  • Subscribers contribute a fixed amount through auto-debit from their savings bank or Jan Dhan accounts.
  • Contributions continue until the subscriber reaches 60 years of age.

Pension Benefits:

  • Assured monthly pension of ₹3,000 after turning 60 years old.
  • 50:50 contribution – The government matches the subscriber’s contribution.

Family Pension:

  • After the subscriber’s death, the spouse receives 50% of the pension amount.
  • If the subscriber dies before 60 years, the spouse can continue contributing or withdraw the accumulated funds.

Exit & Withdrawal:

  • If the subscriber exits before 10 years, only the contributed amount with interest is refunded.
  • If the subscriber exits after 10 years but before 60 years, both contributed amount + accumulated interest are refunded.

Conclusion:

The PM-SYM scheme provides a secure financial future for workers in low-income and unorganized sectors. By ensuring regular pension income, it aims to reduce old-age financial distress and improve the social security of millions of workers in India.

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Date:
February 4
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7:00 am - 11:30 pm
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