Economic Survey Series – II

State of the Economy: Steady as she goes

• Performance – The fiscal balances of the general government (central and State) together have improved progressively.

• Resilient domestic economy - The Indian economy recovered swiftly from the pandemic, with its real GDP in FY24 being 20% higher than the pre-COVID, FY20 levels.
• Improved states government finance – State governments continued to improve their finances in FY24.

• The quality of spending by state governments has improved in recent years, with state governments focusing more on capex.
• The capex of 23 states as a per cent of GDP improved from 2.2 in FY20 to 2.6 in FY24.
• Decreased government debt - Since the pandemic, the Union and the State Governments have focussed on fiscal consolidation, thus declining debt trajectory of the government till FY23.
• States’ debt burden is gradually easing and the general government debt to GDP ratio increased slightly in FY24.
• Moderation in inflation pressure – There is declining core inflation but volatile food inflation.

According to Economic Survey 2023-24, India is projected as a high-growth and low-inflation economy.

• Resilient financial system - Data from the RBI’s Financial Stability Report of 2024 show that, the Gross Non-Performing Assets (GNPA) ratio declining to 2.8% in March 2024, a 12-year low.
• Safer India’s external sector - On the external front, moderation in merchandise exports continued during FY24 on account of weaker global demand and persistent geopolitical tensions.
• India's service exports have remained robust.
• However, a sharper decline in India’s merchandise import growth, owing to declining commodity prices, resulted in a lower trade deficit in FY24.
• Reduction in macro vulnerability - The fiscal deficit of the Government is expected to drop to 4.5% of GDP or lower by FY26.
• The Government continues to stick to the fiscal glide path and kept the sovereign debt sustainable.
• This is reflected in the downward trajectory of the macroeconomic vulnerability index.

Macroeconomic vulnerability index is an index constructed by combining India’s fiscal deficit, Current Account Deficit and inflation.

• Inclusive growth - India’s social welfare approach has undergone a shift from an input-based approach to outcome-based empowerment.
• Saturation of basic necessities has been recognised as imperative to achieve this, thus impelling an array of flagship initiatives.
• The approach also involves the targeted implementation of reforms for last-mile service delivery to truly realise the maxim of “no person left behind”.
• Improvement in employment - According to the annual PLFS, the all-India annual unemployment rate (persons aged 15 years and above, as per usual status) has been declining since the pandemic.
• There is also a rise in the labour force participation rate and worker-to-population ratio.
• From the gender perspective, the female labour force participation rate has been rising for six years.
• Reduced poverty - The focus on addressing individual deprivations helped in reducing the incidence of poverty.
  • Niti Aayog – There is a steep decline in the headcount ratio of multidimensionally poor between 2015-16 and 2022-23.
• Reduced rural-urban inequality – There is rising consumption spending, as evident from the Household Consumption Expenditure Survey (HCES) 2022-23.
• The monthly per capita consumption expenditure (MPCE) in 2022-23 increased in real terms in both rural and urban areas over 2011-12.
• The difference between rural and urban MPCE also declined in percentage terms.
• Forecast – Indian economy looks forward to FY25 optimistically, anticipating broad-based and inclusive growth.

References

India Budget| State of Economy

Sustainable Aviation

Why in news?

With the recent boom in the global aviation sector and rising air travel demand in India, concern for global carbon emissions due aviation is at the forefront.

What is Aviation?

• Aviation sector – It is concerned with the development and operation of heavier-than-air aircraft, such as airplanes, helicopters, gliders, and drones.
• Importance – It provides a rapid worldwide transportation network that generates economic growth, creates jobs, and facilitates international trade and tourism.
• Economic growth- Air travel is essential for trade, business, and tourism, and every day, 128,000 flights carry 12.5 million passengers and $18 billion of world trade.
• It enables $3.5 trillion in global GDP and supports 87.7 million jobs worldwide.
• Connectivity- They link major cities and small communities 24 hours a day and flying is considered one of the safest and quickest ways to get around.
• Air cargo transports goods like electronics and fresh produce, ensuring timely deliveries and global trade growth.
• India – According to the International Air Transport Association (IATA), India poised to become the world's third-largest air passenger market by 2030.

Why there is a need to switch for sustainable aviation fuel?

• Aviation is carbon-intensive activity – Though this mode of travel contributes just 2.5% of the world’s carbon emissions, it might increase with more population opting for air travel.
• Increased demand for air travel – A rising aspirational middle-class, especially in developing countries including India has spurred the growth of the aviation sector.
  • The Indian Brand Equity Foundation predicts the country will need over 2,800 new commercial aircraft in the next 20 years.

• Increased Jet fuel demand - It ran at 8 Mbpd (million barrels per day) in 2019, could rise to 18 Mbpd by 2050, as the global population rises 25%.
• Pollution by aviation fuels - Today's aviation fuels (mostly the widely-used Aviation Turbine Fuel - ATF) consist primarily of hydrocarbon compounds and contain additives that are determined by the specific uses of the fuel.
• They emit CO2 from burning fuel.

Aviation turbine fuel (ATF), also known as jet fuel, is a petroleum-based fuel that powers aircraft with gas-turbine engines. It consists of hydrocrabons like paraffins, cycloparaffins or naphthenes, aromatics, and olefins.

• Alter the concentration of atmospheric gases - They generate a short-term increase, but a long-term decrease in ozone and methane.
• It has also heightened emissions of water vapour, soot, sulphur aerosols, and water contrails.
• Net global warming - While some of these impacts result in global warming, others induce a cooling effect.
• But overall, the warming effect is stronger, pegged at 4% by most estimates.

What is Sustainable Aviation Fuel (SAF)?

• SAF – It is an alternative fuel made from non-petroleum feedstocks that reduces emissions from air transportation.
• Criteria for to be a SAF – They must be derived from a low-carbon raw material that can be continually and repeatedly sourced.
• They must not deplete natural resources or compete with other requirements such as food production, land and water use
• They must be an alternative to traditional aviation energy sources and be processed to create jet fuel in an alternative manner

• They must meet the same rigorous technical requirements and share the same properties as conventional jet fuel, so that they
  • Can be blended with other fuel
  • Can be used in commercial aircraft without requiring changes to existing technology and fuel systems, all in a safe way

The international aviation industry has set an aspirational goal to reach net zero carbon by 2050. Airlines and manufacturers are investing heavily in SAF, with giants Boeing and Airbus keen on tapping this disruptive trend.

• Source – They are derived from renewable resources such as plant oils, waste oils, and agricultural residues.
• Flexible production - SAF is a replacement for conventional jet fuel, allowing for multiple products from various feedstocks and production technologies.
• Compatible fuel – It can be blended with conventional Jet that can be used in existing aircraft and infrastructure.
• It can be blended at different levels with limits between 10% and 50%, depending on the feedstock and how the fuel is produced.
• Fewer emissions - Compared with conventional jet fuel, 100% SAF has the potential to reduce greenhouse gas emissions by up to 94% depending on feedstock and technology pathway.

What lies ahead?

• The governments and international organizations need to implement regulations and standards aimed at reducing aviation's environmental impact.
• Investing in sustainable technologies can lead to long-term cost savings, create new job opportunities, and drive innovation within the aviation industry.

References

1. The New Indian Express| Need for Sustainable Aviation Fuel
2. ICAO |Future of Aviation

UPSC Daily Current Affairs | Prelim Bits 26-07-2024

Pratyaksh Hanstantrit Labh (PAHAL) Scheme

The Union government has introduced Aadhar-based LPG customer authentication to improve beneficiary targeting in the PAHAL and Ujjwala Schemes.

• The PAHAL or Direct Benefits Transfer for LPG (DBTL) scheme is an initiative aimed at transferring subsidies directly into the bank accounts of consumers purchasing LPG cylinders.
• Launched in - June 2013.
• The scheme was later modified and relaunched on January 1, 2015.
• Nodal Ministry- Ministry of Petroleum and Natural Gas.
• Aim- This scheme aims to reduce subsidy leakage, eliminate duplication, and ensure subsidy reaches the intended beneficiaries.
• Eligibility- All domestic LPG consumers who have completed the KYC process and linked their Aadhaar or bank account details with their LPG consumer number are eligible.
• The subsidy amount is directly transferred to the consumer's bank account after the purchase.
• Subsidy- A targeted subsidy of Rs.300 per 14.2 kg cylinder for up to 12 refills of 14.2 Kg equivalent domestic LPG is being provided to all PMUY consumers.
• In addition, various State Governments have also been providing subsidized refills or further subsidies to PMUY beneficiaries.
• Key Features of Scheme
  • To streamline the subsidy distribution process for LPG cylinders.
  • To reduce misuse and diversion of subsidized LPG.
  • To ensure that the benefits reach the deserving sections of society directly.
• Total participation- As July 2024, more than 30.19 crore LPG consumers are enrolled under PAHAL scheme.

Reference

PIB | PAHAL Schemes

Type of Reactors

During the 2024 Budget speech, the Finance Minister highlighted small modular reactors (SMRs) as a promising technology.

• Bharat Small Reactors are compact nuclear reactors designed to generate electricity on a smaller scale than traditional large nuclear power plants.
• The BSRs will be based on India's tried and tested 220-megawatt pressurized Heavy Water Reactor (PHWR) technology, of which 16 units are already operational in the country.

A pressurized heavy-water reactor (PHWR) is a nuclear reactor that uses heavy water (deuterium oxide D2O) as its coolant and neutron moderator.

• Objective- SMR reactors represent a significant shift in India's nuclear energy strategy, aiming to make nuclear power more accessible and versatile.
• PPP model- The government plans to partner with the private sector to set up Bharat Small Reactors and conduct R&D on small modular reactors and new nuclear technologies.

References

1. The Hindu | Reactors
2. India Today | Bharat Small Reactors

Vishnupad Temple and Mahabodhi Temple

The Finance Minister announced during her Union Budget Speech recently that corridor projects will be built for the Vishnupad Temple and the Mahabodhi Temple.

Vishnupad Temple

• The temple is dedicated to Lord Vishnu located in Gaya, Bihar.
• It was built by Queen Ahilyabai Holkar in 1787 on the banks of the Phalgu River.
• It is around 100 feet tall and has 44 pillars.
• Dharmasila, the footprint of Lord Vishnu etched into a slab of basalt, marks the location of this temple.
• The entire temple is carved by the large grey granite stones joint with iron clamps.

Mahabodhi Temple

• It is one of the 4 sacred sites associated with the life of Lord Buddha and is significant as the location where Buddha attained Enlightenment.
• It is located in Bodh Gaya in Bihar, on the banks of the Niranjana River.
• Built by – Emperor Ashoka in the 3^rd century B.C.
• The temple is recognized as a World Heritage site by UNESCO.
• The temples is completely built in brick had significant influence on the development of brick architecture over the centuries.

Reference

Indian Express | Vishnupad and Mahabodhi temples

The National Mission for Manuscripts (NMM)

Union Minister for Culture and Tourism speaks about the National Mission for Manuscripts (NMM) recently.

• Aim- The Mission seeks to unearth and preserve the vast manuscript wealth of India.

• Establishment- 2003.
• Nodal agency- Ministry of Tourism and Culture.
• Mandate- The Mission has the mandate of identifying, documenting, conserving, and making accessible the manuscript heritage of India.
• Motto- NMM is working towards fulfilling its motto, ‘conserving the past for the future’.
• Objectives
  • Locate manuscripts through national level Survey and Post-Survey
  • Document each manuscript and manuscript repository, for a National Electronic Database.
  • Conserve manuscripts incorporating both modern and Indigenous methods of conservation and training a new generation of manuscript conservators
  • To train the next generation of scholars in various aspects of Manuscript Studies like languages, scripts, and critical editing and cataloging of texts and conservation of manuscripts
  • To promote access to manuscripts by digitizing the rarest and most endangered manuscripts
  • To promote access to manuscripts through the publication of critical editions of unpublished manuscripts and catalogs
  • To facilitate the public's engagement with manuscripts through lectures, seminars, publications, and other outreach programs
• Significance
  • India possesses an estimate 10 million manuscripts, probably the largest collection in the world.
  • These cover a variety of themes, textures and aesthetics, scripts, languages, calligraphies, illuminations and illustrations.

References

1. PIB | The National Mission for Manuscripts (NMM)
2. Ministry of Culture | The National Mission for Manuscripts

Peliosanthes Meghalayensis

An extraordinary rare plant species was discovered in the Wari Chora in Garo Hills in Meghalaya.

• Peliosanthes Meghalayensis is a small terrestrial and evergreen herb, that thrives sporadically on the slopes towards the Wari Chora gorge in Meghalaya.
• Family –Asparagaceae.
• Habitat - Evergreen forest, boasts a humid climate ideal for this species.
• Distribution - These are distributed in south and southeast Asia, covering India, Nepal, Myanmar, Thailand, Malaysia, Indonesia, Vietnam, China and Taiwan.
• Similarity - It is Similar to P. pumila but differs chiefly by knobby rhizome, broader leaf blades, closer transversal veinlets, slightly larger cernuous flowers, and pistils with 6 distinct ridges.
• Conservation Status – Its wider distribution remains unknown, prompting a provisional assessment as Data Deficient (DD).

Reference

1. Hub Network | Peliosanthes Meghalayensis
2. Science Direct | Peliosanthes meghalayensis