GS-3, Indian Economy, Uncategorized

Government plans 27,000km economic corridors

The government is planning to make 44 highway stretches totalling 27,000 km to be developed as “economic corridors” for seamless movement of cargo vehicles, cut delays, deepen economic activities and create jobs.

  • This will be the biggest highway expansion plan since the rolling out of Golden Quadrilateral and North South East West Corridor, totalling 13,000 km during the Vajpayee regime.

Details:

  • The new stretches pass through and connect major hubs of economic activities such as manufacturing clusters and ports.
  • It will help in decongesting 30 top cities in the country by building ring roads and logistics hubs along these corridors.
  • The new plan is expected to be completed in six years. The government is exploring several funding options, including road development cess, loans from agencies and also private investment.
  • The government is also planning to develop another 15,000 km as feeder routes to these economic corridors. 40 interconnecting corridors will also be developed to link 44 economic corridors and the Golden Quadrilateral. This network will carry 80% of the country’s freight.
  • The government will also rebrand national highways as national corridors, economic corridors and feeder roads, a move aimed at helping in navigation and identifying the roads. The corridors have been identified using satellite imagery.
Editorials, GS-3, Science & Tech

Voluntary Vehicle Fleet Modernization Programme (V-VMP)

The road transport and highways minister, in May 2016, released the first draft of the proposed Voluntary Vehicle Fleet Modernization Programme (V-VMP).

  • The programme proposes to offer tax benefits and discounts to people who junk old vehicles and replace them with new ones. Its primary intention is to reduce emissions and the priority is to get old fuel-guzzling and polluting trucks off the roads.

What has happened now?

Finance ministry has raised objections over few provisions in the scheme. These include provisions related to:

  • Number of vehicles to be scrapped.
  • Excise duty exemption.
  • Infrastructure creation.
  • Investments

Why Finance Ministry is opposing?

The scheme takes 28 million vehicles off the road and according to the Finance Ministry it is difficult to provide exemptions or rebates to such a huge number of vehicle owners. Besides, it would also lead to a financial burden on the government.

What’s the issue now?

Road transport and highway minister Nitin Gadkari is all set to make another attempt to convince finance minister Arun Jaitley to approve the Voluntary Vehicle Fleet Modernization Programme (V-VMP) in its current form.

What is V-VMP?

It is a policy proposed by the Road Ministry aimed at pushing 28 million decade-old polluting vehicles off the road. The policy aims at incentivising people to retire their old vehicles that were bought before March 2005 or are below BS IV standards.

  • As per the proposed policy, vehicles bought prior to March 31, 2005 or those below BS IV emission standards would be eligible for incentives if those were scrapped and replaced by new ones.
  • A fair value for the scrap, excise duty at 50% of the normal rate on the new vehicle and special discounts from automobile manufacturers are on cards for those who participate.
  • The incentives are expected to reduce the cost of a new vehicle for a buyer on an average 8-12%.
  • The policy recommends complete excise exemption for state transport buses to encourage public transport to shift to newer and higher capacity buses which will also help decongest roads.

Why it is needed?

Analysis of segment and age of vehicles causing air pollution has shown that MHCVs (Medium & Heavy Commercial Vehicles) constitute just 2.5% of the total fleet but contribute to 60% of pollution.

Besides, the older vehicles, typically more than 10 years of age and pre-BS I compliant, constitute 15% of the total fleet but pollute 10-12 times more than a new vehicle because of drastic change in pollution norms.
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Incentives proposed:

Under V-VMP, the road ministry has proposed that vehicle owners scrapping their old vehicles will get monetary incentives to buy a new vehicle in three forms to aid adoption of this programme:

  1. Scrap value from old vehicle.
  2. Automobile manufacturers’ special discount.
  3. Partial excise duty exemption.

Other details:

  • The scheme will focus initially on incentivising buyers of new commercial vehicle and keep passenger vehicles out of its ambit. It also won’t cover two-wheelers in the first phase.
  • Given that commercial vehicles change hands two to three times during their lifecycle, the government is also working out ways to issue tradeable certificates which would incentivise the last owner to scrap the truck and subsidise the purchase of the primary buyer. This will create a win-win situation for all stakeholders and make the overall dynamics of commercial vehicle trade more vibrant.
  • Under the plan, those opting for V-VMP will have to deposit documents relating to the vehicle at the recycling centre. After verification, the owner will get a VVMP certificate and the price for the scrap. He has to provide the certificate to the dealer while buying the new vehicle to avail of the discount.
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Why it is a good scheme?

  • The scheme has the potential to reduce the vehicular emission by 25-30% and saving oil consumption by 3.2 billion liters per year. The reducing in oil consumption by new vehicles will help save nearly Rs 7,000 crore in oil import.
  • Implementation of the scheme for trucks and buses would result in 17% reduction in CO emissions, 18% reduction in HC+NOx emissions and 24% reduction in PM emissions.
  • Also, the policy would boost sales of automobile manufacturers leading to higher production capacity utilisation and the automobile manufacturers would support the government in this initiative “financially by giving special discounts to customers buying vehicles under this scheme”.
  • Besides reducing emissions, it generates steel scrap worth Rs. 11, 500 annually, reducing steel import burden.
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Way ahead:

Road Ministry will clarify before the Finance Ministry that in the first phase, the target would be just medium and heavy vehicles which are just 1.2 million as compared to finance ministry’s estimate of 28 million.

As far as revenue loss on excise duty is concerned, Road Ministry will try to convince Finance Ministry, stating that with the old vehicles running on road, the revenue loss would be more. If the new vehicles are purchased, at least there would be some additional revenue for the government.

Similar experiments in other countries:

A scheme known as Cash for clunkers has been implemented across the globe in countries like the UK, US, Germany, France and Spain, for limited periods during the global recession of 2009, in a bid to drive sales in the domestic auto industry. The government buys up some of the oldest, most polluting vehicles and scraps them.

  • In the US, cash for clunkers was introduced during the recession and was an attempt to stoke growth within the economy. the scheme was tailor made in such a way that it also incentivised the US consumer to shift away from gas guzzlers.
  • Under the UK car scrappage scheme, a £2,000 incentive was paid to motorists who scrap cars registered before 31 August 1999 to buy a new car. The government contributed £1,000 and the remaining amount came from the dealers and manufacturers.
  • China substituted an estimated 2.7 million high polluters from the national car fleet by offering rebates of $450 to $900 from June 2009 to May 2010 while Indonesia launched a scrappage scheme in 2009 paying owners of vehicles at least 10 years old MR5,000 ($1,354) was shared equally by the government and auto makers.
GS-2, International Relations, Uncategorized

India signs agreement with IBRD

The Government of India and the World Bank have signed a US$ 9.2 million grant agreement under the World Bank-Global Environment Facility (GEF) Program for the Efficient and Sustainable City Bus Service Project to improve the efficiency and attractiveness of bus services in select Indian cities.

Key facts:

  • The project will demonstrate low cost high impact initiatives in efficient bus operations by focusing on modernizing city bus services through modern depots for improving the maintenance of buses; introducing modern Intelligent Transport Systems and Management Information Systems for better planning and management of operations; and by providing technical support to vehicles and drivers for better fuel efficiency, among others.
  • Demonstration cities where the various initiatives for improving city bus services will be undertaken are Mira Bhayandar in Maharashtra, Chandigarh, Jaipur, and Bhopal.
  • This project will complement the Government of India’s Bus Funding Scheme launched to promote public transport by supporting cities to modernize their bus services.
  • The initiatives for modernizing city bus transport services under this project will also help select cities reduce greenhouse gas emissions (GHG) while offering practical transport solutions.
  • The project is designed to specifically focus on identifying regulatory, institutional and fiscal constraints to operation of sustainable city bus services and address the weak capacity in the urban bus sector and facilitate the development of a vibrant urban bus sector community through the development of a comprehensive capacity building program.

Background:

The World Bank Group-Global Environment Facility (GEF) directly support actions to combat major environmental issues such as climate change, loss of biodiversity, polluted international waters, land degradation and desertification, and persistent organic pollutants, as well as stimulate green growth. The program supports an active portfolio of over 200 investments globally.

Editorials, GS-3, Indian Economy, Uncategorized

With connectivity comes growth

Livemint

Issue:

  • The paramount measure of power in the 21st century is connectivity, specifically to global infrastructure networks, trade flows, capital markets and the digital economy.
  • India is now getting connected in each of these arenas and is thus taken much more seriously as a long-term pillar of the global system.

India in its neighbourhood:

  • India and Pakistan should move forward with the Most Favoured Nation trade agreement, Iran-Pakistan-India (IPI) gas pipeline from Iran, and even by revitalizing and upgrading the railway connections between Delhi and Lahore, and Karachi and Mumbai.
  • The ancient Grand Trunk (GT) Road from Kabul to Kolkata should be actively resurrected as a Central to South-East Asian trade artery which will enable Indian commercial leadership across this high-growth region in ways traditional moribund groups such as South Asian Association for Regional Cooperation never could.
  • Indians must remember that India’s neighbours are not waiting for it to take a leadership role in leveraging connectivity for influence.
  • The Chinese-led Asian Infrastructure and Investment Bank will strengthen China’s connectivity with Central and West Asia, while the China-Pakistan Economic Corridor reaching Karachi and the port of Gwadar will effectively make China an Indian Ocean power through its client partner Pakistan.
  • To not connect to Pakistan and beyond is to further cede strategic ground along the 21st century’s new Silk Roads.

In South-East Asia:

  • Despite the long border India shares with Myanmar, trade relations and airline connections are minimal.
  • The country still depends on China for most of its exports and most of its inbound investment.
  • Not only should the future GT Road extend through Bangladesh all the way to Yangon, but the three governments should accelerate efforts to construct a gas pipeline stretching from Sittwe on the Bay of Bengal through India’s northeastern states of Mizoram and Tripura and across central Bangladesh to Kolkata.
  • The BCIM (Bangladesh, China, India, Myanmar) trade corridor along the old Stilwell Road should also be upgraded more rapidly in order to facilitate trade connectivity between India, Bangladesh, Myanmar and China, uplifting the neglected populations along the route.
  • The Association of Southeast Asian Nations region has half the population of India but a larger gross domestic product, and now attracts more foreign direct investment (FDI) year on year than China does. South-East Asia is now the world’s factory floor.
  • India too is expected to surpass China in inward FDI this year, complementing its now higher growth rate as well.
  • The combination of fast growth and rising FDI are mutually reinforcing, with global markets bearish on China and favourable towards India’s long-term demographic fundamentals, opening economy and long overdue focus on infrastructure.

Ties with China:

  • Ties with China is also essential to any grand strategy premised on connectedness.
  • China ranks as the top trade partner of more than 120 countries in the world, double the number for the US (56), and far higher than for India (only one).
  • Even as India seeks to boost trade relations with countries along the Indian Ocean periphery, it must remain focused on improving its trade balance with China through higher value-added exports, while also attracting ever more FDI from China into power, transportation and other sectors.

What government can do?

  • So long as commodities’ prices remain low, Current government can keep inflation in check and continue its major commitments to roads and railways, ports and airports, and modernizing dozens of cities across the nation.
  • All of these are investments in making India more connected both internally and externally so that its population can reach its full potential.

Beyond transportation and energy, the third category of connectivity is, communications:

  • India and China represent the two largest online populations in the world—but as a percentage of the total population, only about half of Indians have functional Internet access.
  • And yet, developing countries gain a 1-2% increase in GDP with every 10% of the population that gets online.
  • The Indian government and major telecom firms may not want Facebook to be the agent of digital connectivity, but then they should step up and fulfil the responsibility themselves.
  • The Digital India initiative, which aims to boost 4G coverage and deliver last-mile Internet connectivity, is a good step in this regard, but India still ranks 44 on Huawei’s most recent 2016 Global Connectivity Index.

Conclusion:

  • The 21st century will be permanently multi-polar, with the US, Europe, China, India, Russia and other powers all playing crucial roles.
  • But it will also feature an intense tug-of-war over global financial flows and industrial supply chains.
  • Make in India is a strong example of how India can become more relevant by becoming more intertwined with global production networks in the manner that the Indian software industry has already achieved.
  • Ultimately, it is this commercial and technological connectivity with the rest of the world that will enable India to earn—and retain—a commanding position on the world stage.
Environment, GS-3, Uncategorized

Diesel vs Petrol as a pollutant

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So, why is diesel the fuel of choice for bigger vehicles? Apart from the fact that it is cheaper than petrol in India, the diesel engine is more efficient. The diesel combustion cycle yields a leaner fuel-air mixture to operate at optimal efficiency as compared to petrol engines. Measured by volume, diesel is more energy-dense than petrol. The combustion cycle itself works best at leaner mixtures, and diesels deliver a torque curve that works better for bigger cars and trucks as compared to petrol.

Plus, most diesels are equipped with a turbocharger, which offers a sharp surge in power delivery after a certain RPM, a feature that is popular with customers of bigger cars and SUVs. Modern diesels also emit lesser carbon dioxide than petrols, something that has been instrumental in the spread of diesels in markets such as Europe.

Diesel engines also emit higher levels of nitrogen oxides, and over seven times more particulates as compared to petrol engines — pollutants that cause respiratory ailments.

The big reason for the higher efficiency of diesel engines boils down to the engineering design. While both petrol and diesel engines work by internal combustion, they do so in slightly different ways.

In a petrol engine, fuel and air is injected into small metal cylinders, and then a piston compresses the mixture, making it explosive. A small electric spark from a sparking plug sets fire to it, which makes the mixture explode, generating thrust. This then pushes the piston down the cylinder, and through the crankshaft, turns the wheels.

In pure design terms, diesel engines are simpler. First, air is let into the cylinder and the piston compresses it, but in this case, much more than in a petrol engine. While in a petrol engine, the fuel-air mixture is compressed to about a tenth of its original volume, in a diesel engine, the air is compressed by anything between 15 and 25 times. Compressing a gas generates heat, and once the air is compressed, a mist of fuel is sprayed into the cylinder by an electronic fuel-injection system, which works a bit like an aerosol spray. The air is so hot that the fuel instantly ignites and explodes — without the need for a spark plug. This controlled explosion pushes the piston back out of the cylinder, producing the power that drives the vehicle.

Diesel engines tend to be up to twice as efficient as petrol engines. The reasons for this include the lack of a spark-plug ignition system. As a result, the fuel is compressed much more, which makes it burn more completely in combination with the air in the cylinder, thereby releasing more power.

Also, in a petrol engine that is working at less than full power, more fuel (less air) needs to be suppled to the cylinder to keep it running, while diesel engines actually consume less fuel when they are working at lower power. This lowers fuel usage while idling.

Plus, measured by volume, diesel fuel is more energy-dense than petrol, and thereby offers more energy per litre than petrol. Diesel — which is a lower-grade, less-refined product of petroleum made from heavier hydrocarbons — is also a better lubricant than petrol, with the result being that a diesel engine runs with less friction, thereby generating better efficiency.

Diesels are also noisy, and they produce a lot of unburnt soot particles and nitrogen oxides. However, since diesel engines are more efficient, they typically use less fuel and thereby produce lower carbon dioxide emissions.

Flashing Red-  Diesel exhaust contains particulate matter and gases including benzene and nitrogen dioxide, which are agents of serious disease.

Possible Effects –

  1. Lung cancer, even for non-smokers; damage to lungs, possibly brain damage
  2.  Exacerbated allergies, asthma; shortness of breath; eye irritation; nausea
  3. Stress responses in brain; cellular damage linked to Alzheimer’s, Parkinson’s

Thank You!