Table of Contents
INDIAN POLITY, GOVERNANCE AND SOCIAL JUSTICE
INDIA’S AIRSPACE MAP FOR DRONE OPERATIONS
THE CONTEXT: Ministry of Civil Aviation releases India’s airspace map for drone operations. The map is available on DGCA’s digital sky platform at https://digitalsky.dgca.gov.in/home.
WHY ARE DRONES IMPORTANT?
- Drones offer tremendous benefits to almost all sectors of the economy. These include – agriculture, mining, infrastructure, surveillance, emergency response, transportation, geo-spatial mapping, defence, and law enforcement to name a few.
- Drones can be significant creators of employment and economic growth due to their reach, versatility, and ease of use, especially in India’s remote and inaccessible areas.
- Given its traditional strengths in innovation, information technology, frugal engineering and its huge domestic demand, India has the potential of becoming a global drone hubby 2030.
WHAT’S THE LIKELY IMPACT OF THESE DRONE INITIATIVES?
- Thanks to the new rules, the drone PLI scheme and the freely accessible drone airspace maps, the drones and drone components manufacturing industry may see an investment of over INR 5,000 crore over the next three years.
- The annual sales turnover of the drone manufacturing industry may grow from INR 60 crore in 2020-21 fold to over INR 900 crore in FY 2023-24. The drone manufacturing industry is expected to generate over 10,000 direct jobs over the next three years.
- The drone services industry (operations, mapping, surveillance, agri-spraying, logistics, data analytics, software development etc.) will grow to an even larger scale. It is expected to grow to over INR 30,000 crore in the next three years.
- The drone services industry is expected to generate over five lakh jobs in three years.
TOP 10 FEATURES OF THE DRONE AIRSPACE MAPS
- The drone airspace map is an interactive map of India that demarcates the yellow and red zones across the country.
- Green zone is the airspace up to 400 feet that have not been designated as a red or yellow zone; and up to 200 feet above the area located between 8-12 km from the perimeter of an operational airport.
- In green zones, no permission whatsoever is required for operating drones with an all-up weight upto500 kg.
- The yellow zone is the airspace above 400 feet in a designated green zone; above 200 feet in the area located between 8-12 km from the perimeter of an operational airport and above ground in the area located between 5-8 km from the perimeter of an operational airport.
- Drone operations in the yellow zone require permission from the concerned air traffic control authority– AAI, IAF, Navy, HAL etc. as the case may be.
- The yellow zone has been reduced from 45 km earlier to 12 km from the airport perimeter.
- The red zone is the ‘no-drone zone’ within which drones can be operated only after permission from the Central Government.
- The airspace map may be modified by authorised entities from time to time.
- Anyone planning to operate a drone should mandatorily check the latest airspace map for any changes in zone boundaries.
- The drone airspace map is freely available on the digital sky platform to all without any login requirements.
TOP 15 FEATURES OF DRONE RULES, 2021 (NOTIFIED ON 25 AUG 2021)
- Based on a premise of trust, self-certification and non-intrusive monitoring.
- Several permissions and approvals were abolished. The number of forms was reduced from 25 to 5. Types of fees reduced from 72 to 4.
- Digital sky platform is being developed as a user-friendly online single-window system.
- Interactive drone airspace map with red and yellow zones to be released by 24 September 2021.
- No permission is required for operating drones in green zones.
- The yellow zone, where ATC permission is required, has been reduced from 45 km to 12 km from the airport perimeter.
- No remote pilot licence is required for micro drones (for non-commercial use) and drones.
- No security clearance is required before the issuance of any registration or licence.
- Coverage of drones under drone rules, 2021 increased from 300 kg to 500 kg. This will cover drone taxis
- No restriction on foreign ownership in Indian drone companies.
- No requirement of import clearance from DGCA.
- Remote pilot licence to be issued by DGCA within 15 days of the pilot receiving the remote pilot certificate from an authorised drone school.
- The maximum penalty for violations is reduced to INR 1 lakh. Was several lakhs earlier.
- Drone corridors will be developed for cargo deliveries.
- Drone promotion council to be set up by the government with participation from academia, startups and other stakeholders.
TOP 15 FEATURES OF THE PLI SCHEME FOR DRONES (APPROVED ON 15 SEP 2021)
- The total amount allocated for the PLI scheme for drones and drone components is INR 120 crore spread over three financial years. This amount is nearly double the combined turnover of all domestic drone manufacturers in FY 2020-21.
- The incentive for a manufacturer of drones and drone components shall be as high as 20% of the value addition made by her.
- The value addition shall be calculated as the annual sales revenue from drones and drone components (net of GST) minus the purchase cost (net of GST) of drone and drone components.
- The Government has agreed to keep the PLI rate constant at 20%for all three years, an exceptional treatment given only to the drone industry. In PLI schemes for other sectors, the PLI rate reduces every year.
- The proposed tenure of the PLI scheme is three years starting in FY 2021-22. The PLI scheme will be extended or redrafted after studying its impact in consultation with the industry.
- The Government has agreed to fix the minimum value addition norm at 40% of net sales for drones and drone components instead of 50%, another exceptional treatment given to the drone industry. This will allow widening the number of beneficiaries.
- The PLI scheme covers a wide variety of drone components:
- Airframe, propulsion systems(engine and electric), power systems, batteries and associated components, launch and recovery systems;
- Inertial Measurement Unit, Inertial Navigation System, flight control module, ground control station and associated components;
- Communications systems (radiofrequency, transponders, satellite-based etc.)
- Cameras, sensors, spraying systems and related payload etc.;
- ‘Detect and Avoid’ system, emergency recovery system, trackers etc. and other components critical for safety and security.
- The list of eligible components may be expanded by the Government from time to time, as drone technology evolves.
- The Government has agreed to widen the coverage of the incentive scheme to include developers of drone-related IT products
- The Government has kept the eligibility norm for MSME and startups in terms of annual sales turnover at a nominal level – INR 2 cr (for drones) and INR 50 lakhs (for drone components). This will allow widening the number of beneficiaries.
- The eligibility norm for non-MSME companies in terms of annual sales turnover has been kept at INR 4 crore (for drones) and INR 1 crore (for drone components).
- The incentive payable to a manufacturer of drones and drone components shall be simply one-fifth of her value addition.
- PLI for a manufacturer shall be capped at 25% of the total annual outlay. This will allow widening the number of beneficiaries.
- In case a manufacturer fails to meet the threshold for the eligible value addition for a particular financial year, she will be allowed to claim the lost incentive in the subsequent year if she makes up the shortfall in the subsequent year.
ENVIRONMENT, GEOGRAPHY AND AGRICULTURE
TEESTA-V POWER STATION CONFERRED WITH BLUE PLANET PRIZE
THE CONTEXT: NHPC’s 510 MW Teesta-V Power Station located in Sikkim has been conferred with the prestigious Blue Planet Prize by International Hydropower Association (IHA), a London based non-profit membership association.
- The award had been conferred to Teesta-V Power Station based on its sustainability assessment undertaken by a team of accredited lead assessors of IHA in 2019 using the Operation Stage tool of the Hydropower Sustainability Assessment Protocol (HSAP) of IHA.
- The IHA membership includes leading hydropower owners and operators, developers, designers, suppliers and consultants.
- The IHA Blue Planet Prize is awarded to hydropower projects that demonstrate excellence in sustainable development.
- The Hydropower Sustainability Assessment Protocol (HSAP) is the leading international tool for measuring the sustainability of hydropower projects.
- It offers a way to benchmark the performance of a hydropower project against a comprehensive range of environmental, social, technical and governance criteria.
- Assessments are based on objective evidence and the results are presented in a standardized report.
- Indigenous people, local communities, civil society and governments will be involved in the projects.
PROMOTION OF MEDICAL DEVICE PARKS
THE CONTEXT: Recognizing the need for higher levels of investments for the creation of proper infrastructure in the sector, the Department of Pharmaceuticals has notified the Scheme for “Promotion of Medical Device Parks”.
OBJECTIVES OF SCHEME
- Easy access to standard testing and infrastructure facilities through the creation of world-class common infrastructure facilities for increased competitiveness will result in a significant reduction of the cost of production of medical devices leading to better availability and affordability of medical devices in the domestic market.
- Reaping the benefits arising due to optimization of resources and economies of scale.
- Himachal Pradesh, Tamil Nadu, Madhya Pradesh and Uttar Pradesh has given “in-principle” approval to set up Medical Device Parks under the scheme
- The scheme reflects the spirit of cooperative federalism where the Central Government and State Governments will partner to develop the Medial Device parks for better performance of the sector.
BANKS CAN NOW SELL FRAUD LOANS TO ARCS
THE CONTEXT: The Reserve Bank of India (RBI) allowed banks to sell fraud loan exposures to asset reconstruction companies (ARCs). Banks will now be able to transfer to ARCs loan exposures classified as a fraud as on the date of transfer, provided that the responsibilities of the bank with respect to continuous reporting, monitoring, filing of complaints with law enforcement agencies and proceedings related to such complaints shall also be transferred to the ARC.
- The guidelines said lenders must put in place a comprehensive board-approved policy for transfer and acquisition of all loan exposures.
- The board-approved policies of every lender on transfer or acquisition of stressed loans shall cover the norms and procedure for transfer, the valuation methodology to be followed, a delegation of powers to various functionaries for taking decisions on the transfer of loans stated objectives for acquiring stressed assets and the risk premium to be applied.
- When negotiated on a bilateral basis, the negotiations must necessarily be followed by an auction through the Swiss challenge method if the aggregate exposure of lenders to the relevant borrower is `100 crore or more.
- In all other cases, the bilateral negotiations shall be subject to the price discovery and value maximisation approaches adopted by the transferor as part of the board-approved policy.
CHINA’S EVERGRANDE CRISIS
THE CONTEXT: Chinese real estate conglomerate Evergrande Group has been in the news recently over its inability to pay interest on its huge debt obligations. The company recently defaulted on interest payment and is set to miss more deadlines. Many fear that the company is insolvent, and its share price has dropped over 80% in the last year and hit a 10-year low.
WHAT IS THE TROUBLE AT EVERGRANDE?
- The Evergrande Group is China’s second-largest real estate company in terms of total sales and employs over 200,000 employees.
- Its core business deals with buying large amounts of land, developing them into houses, restaurants and so on and selling them to interested buyers.
- The company uses large amounts of debt from banks and investors as well as short-term loans extended by suppliers and property buyers to fund its business.
- It has total liabilities worth over $300 billion and has to pay around $37 billion in interest and maturing debt over the next year.
- The company’s bonds have been downgraded by rating agencies such as Fitch and S&P and have traded well below 50 cents on the dollar, given the company’s precarious financial position.
- The company has also taken money in advance from over 1.5 million property buyers, promising to deliver developed properties to them in the future and is yet to pay many suppliers.
- The company’s wealth management team has collected over $6 billion from its own employees promising high returns.
- It has defaulted on these products and has offered to give away parking spaces and other real estates in lieu of these loans, leading to public outcry.
WHY IS THE COMPANY IN TROUBLE?
- The most immediate trigger of the current crisis, analysts believe, is the Chinese government’s new rules for property developers. In August 2020, the Chinese government came up with rules (also called the ‘three red lines’) stating how much a property developer can borrow given its financial position as measured by three debt metrics.
- The new rules practically cut off Evergrande from taking on any more debt on its balance sheet. This was a big hit to Evergrande’s business as it engaged in heavy borrowing to run its business.
- The company was thus forced to sell its land and other properties at steep discounts to meet its debt obligations. This fire sale of assets, it is said, eventually led to Evergrande’s insolvency.
- Some see the Chinese government’s new rules as a bid to puncture the country’s property bubble and bring about a ‘soft landing’ of the economy.
- Chinese authorities have traditionally encouraged businesses to take on huge amounts of debt through the heavily state-controlled financial sector to develop new properties. This led to the indiscriminate development of properties, so much so that almost a third of the Chinese GDP is made up of the property sector. Millions of properties with very little demand from buyers have been seen in Chinese ‘ghost cities.
- Other analysts, however, believe that the current crisis was a long time coming. They argue that the company’s business model has been unsustainable for a long time.
WHAT LIES AHEAD?
- Some believe that, apart from the roughly $300 billion in debt on its balance sheet, the company may have additional debt in the form of various off-balance sheet obligations.
- Other analysts, however, argue that this is not a cause for worry since the Chinese financial system is state-owned and does not operate to maximise profits. The Chinese state, they believe, will always be ready to bail out entities if necessary. Any such bailout, however, analysts point out, will have costs as it will require the creation of a fresh supply of money, which in turn will debase the value of the Chinese currency.
- Markets are concerned about the effect the crisis in China’s property sector will have on other countries.
- Other critics of China, such as U.S. billionaire investor George Soros, have warned investors to refrain from investing in China, pointing to the absence of the rule of law.
- The Chinese government’s crackdown on the ed-tech sector and businessmen such as Alibaba founder Jack Ma has not gone well with foreign investors.
CHINA’S CENTRAL BANK DECLARES ALL CRYPTOCURRENCY TRANSACTIONS ILLEGAL
THE CONTEXT: China’s central bank said all financial transactions involving cryptocurrencies are illegal, sounding the death knell for the digital trade in China after a crackdown on the volatile currencies.
- The global values of cryptocurrencies including Bitcoin have massively fluctuated over the past year partly due to Chinese regulations, which have sought to prevent speculation and money laundering.
- The crypto crackdown also opens the gates for China to introduce its own digital currency, already in the pipeline, allowing the central government to monitor transactions.
THE CONTEXT: The Ministry of Defence (MoD) placed an order worth over Rs 7,500 crore to Heavy Vehicles Factory (HVF), Chennai for the supply of 118 units of Main Battle Tank (MBT) Arjun’s Mark-1A variant for the Indian Army.
- The Mark-1A has more indigenous content from the Mark-1 variant, thus reducing the dependence on foreign vendors for key components.
- The new variant is also said to have added some comfort features for the four-member crew, which operates in the toughest possible conditions when deployed and also has a better transmission system.
- Some of the features also prepare the tank better for network-centric warfare, which denotes effective use of information technology and computer networking of various force elements.
- The acquisition of 118 tanks — that would come at the cost of Rs 7523 crore — would equip three armoured regiments of the tank.
- This acquisition holds significance in the light of the latest acquisition by the Pakistan army of two tanks — VT-4 and Al-Khalid tanks. Both these tanks, which have Chinese origin, are comparable to the Russian origin T-90 tanks, which are in use by the Indian Army.
- MBT Arjun Mark-1A is ideally suited for the desert terrain and even more effective and lethal compared to the earlier variant due to the new additions.
MODI-BIDEN BILATERAL TALKS
THE CONTEXT: Prime Minister Narendra Modi met US President Joe Biden for their first bilateral meeting at the Oval Office in the White House. Both leaders discussed a wide range of priority issues, including combating Covid-19, climate change, and economic cooperation.
- US President Joe Biden said that the relationship between India and the US- the largest democracies in the world- is destined to be stronger, closer and tighter.
- PM Modi said there is much to be done in trade. Trade will be an important factor in India-USA ties in the coming decade.
MEETING BETWEEN MODI AND KAMALA HARRIS
THE CONTEXT: Prime Minister Shri Narendra Modi met Her Excellency Kamala Harris, Vice President of the United States of America, in Washington DC on 23 September 2021, during his visit to the USA.
- They expressed happiness at their first in-person meeting. They warmly recalled their telephone conversation earlier in June 2021.
- They exchanged views on recent global developments, including in Afghanistan and reaffirmed their commitment towards a free, open and inclusive Indo-Pacific region.
- The two leaders discussed the COVID-19 situation in their respective countries, including ongoing efforts to contain the pandemic through expedited vaccination efforts, and ensuring supply of critical medicines, therapeutics and healthcare equipment.
- Both sides acknowledged the importance of collaborative action on climate change.
- Prime Minister spoke about India’s push for increasing renewable energy and the recently launched National Hydrogen Mission. He also emphasized the importance of lifestyle changes to promote environmental sustainability.
- They also discussed areas of future collaboration, including space cooperation, Information Technology, especially emerging and critical technologies, as well as the cooperation in the healthcare sector. Both leaders acknowledged the vibrant people-to-people linkages as the bedrock of the mutually beneficial education linkages and the flow of knowledge, innovation and talent between our two countries.
- Prime Minister Modi invited Vice-President Kamala Harris and Second Gentleman Douglas Emhoff to visit India soon.
PRELIMS PRACTICE QUESTIONS
1.“Blue Planet Prize” is conferred by?
a) World Bank
b) International Seabed Authority
c) International Hydropower Association
2. Which of the following is not the characteristic of cryptocurrency?
a) Absence of any centralised authority.
b) No third party was involved in the transaction.
c) Centralised ledger systems generally using blockchain technology.
d) Safe and secure payments.
ANSWER FOR SEPTEMBER 24, 2021 PRELIMS PRACTICE QUESTIONS (REFER TO RELEVANT ARTICLE)
- Statement 1 is correct: Cham dance is a traditional monastic dance form of Lamas in the Ladakh region.
- Statement 2 is correct: The costumes and masks are an integral part of the dance.
- Statement 3 is incorrect: Vajrayana form of Buddhism practised in Tibet has incorporated Cham dance.