01-Mar-2024

#GS3 –01. EVs vs Hybrids

In 2023, sale of hybrid cars touched an all-time high of 82,607 units. This marked an over four- fold increase from under 20,000 units in 2022. In comparison, battery-operated electric car sales saw the tally nearly double to 81,710 units from round 41,675 units in 2022. This is the first time hybrid cars have out sold electric cars in one year. This, despite the fact that currently hybrid cars attract a GST of 43%—two percentage points lower than large petrol or diesel cars. Electric cars attract a much lower 5% GST.

Hybrid technology lacks the rock bottom running cost. And the zero tail pipee missions have all the advantages of an EV. But at the same time, hybrids don’t need to be plugged in for charging and there is no range anxiety.

Petrol remained the fuel of choice for new car buyers with a 65% share of new car sales in 2023.But it has lost over a 3 percentage point market share, largely to compressed natural as (CNG), which saw sales grow 30% year- on-year and market share go up to 13%. Diesel was the second most popular fuel of choice with an 18% share of sales, though its share has been largely stable since 2020. CNG is likely to upstage diesel in the future. Hybrids and electric cars equally split the remaining share between them.

– Commentary in News

Key Terms/Issues : Range Anxiety

#GS2 — 02. India at WTO

India urged the World Trade Organization (WTO) to reconsider its ban on charging customs duties for e-commerce goods and services, arguing the moratorium particularly disadvantages developing and least developed countries. The WTO moratorium prevents countries from charging import duties on digital products and services.

India along with South Africa also opposed the inclusion of an Investment Facilitation for Development (IFD)
proposal in the outcome document of the conference.

India stressed the need for digital industrialization as an emerging segment of the global economy due to its potential to play a key role in the economic development and prosperity of developing countries and LDCs.

-Commentary in News

Key Terms/Issues : Investment Facilitation for Development (IFD)

#GS3 –03. Finance Commission

We are presently in the period 2021-22 to 2025-26 covered by the 15th FC, which set states’ aggregate share at 41% of gross tax collections at the Centre (net of tax collection costs). In addition to the tax share (the dominant component), FCs also prescribe absolute statutory grants, unconnected to Central tax revenue.

In FY23, states got a total of ₹ 9.5 trillion as their tax share, which was 31.1% of the reported gross tax revenue of the Centre, well below the target of 40.8% adjusted for collection costs.

The 16th Finance Commission could perhaps incentivize the Centre to merge cesses and surcharges into the basic tax structure in exchange for a lower aggregate share for states.

– Economist Indira Rajaraman

#GS3 — 04. Waste Dumping

In 2020, 38% of all municipal solid waste (810 million tonnes) was uncontrolled: that is, it was dumped in the environment or openly burned. If waste management practices remain the same as today, by 2050 this figure will almost double to 1.6 billion tonnes of MSW dumped or burned every year. The largest growth in MSW generation is expected to take place in fast-growing economies.

– Commentary in News

#GS3 — 05. Agri Reforms

The government to re-visit its open-ended procurement policy for rice and wheat at minimum support prices (MSP) to dissuade farmers from growing these crops and instead move to other crops such as nutri-cereals, pulses and edible oil as their demand could surpass production by 2047.

If farmers diversify away from rice and wheat, they can be compensated for the revenue foregone from these, if any.

Evolving economically feasible cropping patterns suited to the resource endowments to meet the disproportionate increase in the demand for fruits, vegetables, pulses, edible oils, nutri-cereals and maize compared to rice and wheat. Aggressive investment in infrastructure required for perishable commodities to avoid post-harvest losses and reduce high price volatility through private investment.

Promote millet consumption and production, reduce consumption of edible oils which is more than its recommended intake and may adversely affect human health and enhance pulses production.

There is a need for a technological breakthrough in pulses, and for exploring possibilities of their cultivation in rice- fallow areas with the sustained rise in per capita income, changing lifestyles and increasing consumer preferences for nutritious foods, the consumption basket will continue to diversify away from staple cereals towards high-value food commodities.

– NITI Aayog Working Group on Agriculture

#GS3 –06. India’s growth

The higher-than-expected 8.4% economic expansion in the third quarter makes a case for global agencies to revise their FY24 growth forecasts for India upwards to at least 7% even while being conservative. Private investments, already broad-based, will likely gain further traction in the next financial year.

Urban demand remains resilient, while rural demand is growing steadily, if not spectacularly. India remains the fastest-growing major economy as its growth rate of 8.4% eclipsed that of China (5.2%), Indonesia (5%), the US (3.1%), Japan (1%) and France (0.7%).