Editorials/Opinions Analyses For UPSC 2 November 2021

Contents

1. Finding a way out of India’s deepening water stress
2. The crypto conundrum

Finding a way out of India’s deepening water stress

Context:

According to the composite water management index released by the think tank NITI Aayog in 2019, 21 major cities (including Delhi, Bengaluru, Chennai, Hyderabad) were on the brink of exhausting groundwater resources, affecting about 100 million people.

Relevance:

GS-III: Environment and Ecology (Water Resources and their Conservation, Environmental Pollution & Degradation)

Dimensions of the Article:

1. Contextual introduction – Recent developments regarding water crisis in the article
2. More about India’s water-woes
3. Understanding water stress in India and the causes
4. The Need for synergy to tackle the crisis
5. Conclusion

Contextual introduction – Recent developments regarding water crisis in the article

• In 2019, the Ministries of Water Resources, River Development and Ganga Rejuvenation and the Ministry of Drinking Water and Sanitation were merged, which led to the formation of the Ministry of Jal Shakti.
• In 2019, in Chennai, life came to a standstill and parts of the city went without piped water for months.
• According to the composite water management index released by the NITI Aayog in 2019, 21 major cities (including Delhi, Bengaluru, Chennai, Hyderabad) were on the brink of exhausting groundwater resources, affecting about 100 million people. The study also points out that by 2030, the demand for water is projected to be double the available supply.
• The draft report of the Central Ground Water Board concluded that Punjab would be reduced to a desert in 25 years if the extraction of its groundwater resources continues unabated. 82% of Punjab’s land area has seen a huge decline in groundwater levels, wherein 109 out of 138 administrative blocks have been placed in the ‘over exploited’ category.
• Groundwater extraction which was at 35% in the 1960s and 1970s, rose to 70% post the Green Revolution — a period that saw governments subsidising power for irrigation.

More about India’s water-woes

• According to the data provided by the Ministry of Water Resources (now Ministry of Jal Shakti) in 2017, average annual per capita water availability fell from more than 1800 cubic meters assessed in 2001 to just over 1500 cubic meters in 2011.
• The data also highlighted the possibility of average annual water availability per person reducing further to 1341 and 1140 in the years 2025 and 2050 respectively.
• The water availability of water stressed/water scarce regions of the country is much below the national average due to the high temporal and spatial variation of precipitation.
• According to the Global Annual Report, 2018 by the WaterAid, the water and sanitation advocacy group, India ranked at the top of 10 countries with lowest access to clean water close to home, with more than 16 crore people not having such access.
• According to a UNICEF Report in 2021, India has 4% of the world’s freshwater which has to cater to 17% of the world’s population.
• The UNICEF report of 2021 says that nearly 40% of the population in India will have absolutely no access to drinking water by 2030 and 6% of India’s GDP will be lost by 2050 due to the water crisis.

Understanding water stress in India and the causes

• In the rural areas, 80%-90% of the drinking water and 75% of the water used for agriculture is drawn from groundwater sources.
• In urban areas, 50%-60% of the water supply is drawn from groundwater sources, whereas the remaining is sourced from surface water resources such as rivers, often located afar, in addition to lakes, tanks and reservoirs.
• Groundwater extraction which was at 35% in the 1960s and 1970s, rose to 70% post the Green Revolution — a period that saw governments subsidising power for irrigation.
• Cultivation of water-intensive crops such as paddy has further aggravated water depletion, even to the extent of turning the water saline.
• Lack of rainfall also could be one of the reasons as seen in the case of the 2019 water crisis in Chennai when the rainfall was 50% less than normal.
• Encroachment in cities like Chennai and Mumbai where buildings have been built by incrementally encroaching on floodplains and paving over lakes and wetlands which results in the lack of space for water to percolate underground has prevented rainwater from recharging the aquifers.

The Need for synergy to tackle the crisis

• Ministries & other institutions must reconfigure synergy among them: The Ministry of Water Resources should bring synergy in its relationship with other Ministries and Departments – like Local Self-Government, Agriculture and Environment.
• Effective land zoning regulations: With enhanced integration and coordination through effective land and water zoning regulations that protect urban water bodies, groundwater sources, wetlands and green cover.
• Measures need to be taken to manage and replenish groundwater, especially through participatory groundwater management approaches with its combination of water budgeting, aquifer recharging and community involvement.
• Importance also needs to be given to surface water conservation, which is in a critical and dying state due to encroachment, pollution, over-abstraction and barrier in water flow by dams.

Conclusion

• In 2019, the Ministry of Jal Shakti had announced an ambitious plan to provide water connections to every household in India by 2024.
• Along with this aim, the need of the hour is to protect and conserve water resources on the one hand and minimise and enhance the efficiency of water usage on the other.

-Source: The Hindu

The crypto conundrum

Context:

The demand and consequently the prices/value of cryptocurrencies is surging while witnessing an increasing participation of retail investors in India.

Relevance:

GS-III: Indian Economy (Banking, Money), GS-III: Science and Technology (Developments in Science and Technology, Application of Technology in Daily life, Blockchain technology)

Dimensions of the Article:

1. Recent developments regarding Cryptocurrencies
2. What are cryptocurrencies?
3. How are they different from actual currency?
4. How do cryptocurrencies derive their value?
5. Advantages of cryptocurrencies
6. Disadvantages of Cryptocurrencies

Recent developments regarding Cryptocurrencies

• Recently, China imposed a complete ban on all cryptocurrencies and plans to issue its own central bank-issued digital currency.
• Since 2020, when the Supreme Court overturned an order by the RBI restricting the use of cryptocurrencies, traffic in domestic cryptocurrency exchanges in India has grown many-fold.
• Limited supply is the most important feature of cryptocurrencies that is attracting investors.
• Also, due to its high liquidity, investors are looking to protect their wealth by investing in crypto assets, whose supply cannot be cranked up as easily.

What are cryptocurrencies?

• Cryptocurrencies are e-currencies that are based on decentralized technology and operate on a distributed public ledger called the blockchain.
• Blockchain records all transactions updated and held by currency holders.
• The technology allows people to make payments and store money digitally without having to use their names or a financial intermediary such as banks.
• Cryptocurrency units such as Bitcoin are created through a ‘mining’ process which involves using a computer to solve numerical problems that generate coins.
• Bitcoin was one of the first cryptocurrencies to be launched and was created in 2009.

How are they different from actual currency?

• The Main difference is that unlike actual currencies cryptocurrencies are not issued by Governments.
• Actual money is created or printed by the government which has a monopoly in terms of issuing currency. Central banks across the world issue paper notes and therefore create money and assign paper notes their value.
• Money created through this process derives its value via government fiat, which is why the paper currency is also called fiat currency.
• In the case of cryptocurrencies, the process of creating the currency is not monopolized as anyone can create it through the mining process.

How do cryptocurrencies derive their value?

• Any currency has its value if it can be exchanged for goods or services and if it is a store of value (it can maintain purchasing power over time).
• Cryptocurrencies, in contrast to fiat currencies, derive their value from exchanges.
• The extent of involvement of the community in terms of demand and supply of cryptocurrencies helps determine their value.

No fundamental value

• Whether Bitcoins and other cryptocurrencies possess any use-value or exchange value is very questionable as they neither offer direct use value nor possess significant exchange value.
• They also possess no significant fundamental value to sustain the current high prices.

Advantages of cryptocurrencies

• Limited supply limiting inflation risks.
• Funds transfer between two parties will be easy without the need for a third party like credit/debit cards or banks.
• It is a cheaper alternative compared to other online transactions.
• Payments are safe and secured and offer an unprecedented level of anonymity.
• Modern cryptocurrency systems come with a user “wallet” or account address which is accessible only by a public key and private key. The private key is only known to the owner of the wallet.
• Funds transfers are completed with minimal processing fees.

Disadvantages of Cryptocurrencies

• The almost hidden nature of cryptocurrency transactions makes them easy to be the focus of illegal activities such as money laundering, tax evasion and possibly even terror financing.
• Payments are not irreversible.
• Cryptocurrencies are not accepted everywhere and have limited value elsewhere.
• There is concern that cryptocurrencies like Bitcoin are not rooted in any material goods. Some research, however, has identified that the cost of producing a Bitcoin, which requires an increasingly large amount of energy, is directly related to its market price.

-Source: The Hindu