Editorials/Opinions Analysis For UPSC 02 August 2023

Editorials/Opinions Analysis For UPSC 02 August 2023

Contents

1. Rethinking India’s Clean-Cooking Strategy: Beyond LPG Subsidies
2. Strengthening U.S.-India Trade: A Road to a Strong Partnership

Rethinking India’s Clean-Cooking Strategy: Beyond LPG Subsidies

Context

• The adoption of liquefied petroleum gas (LPG) in urban households has made a substantial contribution to India’s efforts to promote clean cooking alternatives. Due to the success of the Grameen Vitrak Yojana and Pradhan Mantri Ujjwala Yojana (PMUY), nearly all rural and lower-income households now have access to LPG.
• But current issues like the COVID-19 outbreak and unstable global crude prices have caused LPG consumption to fall. Over 1 crore beneficiaries only had their cylinders refilled once during the previous fiscal year, while 90 lakh recipients did not refill them at all. Despite offering free refills during the COVID-19 pandemic, the Ujjwala Yojana’s yearly LPG use per connection remains at 3.66 refills.
• India must investigate a wide range of clean-cooking technologies and move away from a reliance solely on LPG in order to maintain sustainable clean cooking practises.

Relevance: 

GS Paper 3 – Clean Energy

Mains Question

Describe the difficulties the Pradhan Mantri Ujjwala Yojana (PMUY) is facing and suggest a variety of clean cooking techniques, such as solar cooking, biogas cooking, and electric cooking. Discuss feasible finance strategies to facilitate this transformation, and discuss its effects on the environment and the economy. (150 Words)

Challenges and the LPG Story

• The Indian government has made outstanding efforts to encourage LPG adoption in households during the past 15 years. From 33% in 2011 to 71% in 2020, LPG use as the principal cooking fuel in Indian households grew.
• Recent worldwide events, like as the COVID-19 epidemic and Russia’s invasion of Ukraine, have made it difficult for Indian households to maintain their LPG consumption.
• All users lost access to the LPG subsidy in 2020, and even though PMUY customers received three free cylinders in FY21, only some of them were actually used.
• In FY23, reintroducing a modest subsidy of $200 per cylinder for PMUY consumers had a positive impact on refill rates, but since May 2020, LPG prices have climbed by a factor of two, and the country’s reliance on imported LPG has progressively increased to over 64%. It is unclear that the LPG subsidy will continue at the same levels due to budgetary restrictions and unknown foreign prices.

PM Ujjwala Programme:

• The PMUY was first introduced in 2016 with the intention of connecting 8 crore people by March 2020, with 5 crore women from BPL homes receiving LPG connections. Later, the aim was amended to 8 crore connections and the scope was increased to include women recipients from seven more categories. More than 9 crore connections have already been made available, while PMUY 2.0, which was launched in 2021, provided an additional 1 crore low-income families with deposit-free LPG connections. Additionally, the government has set a goal of providing piped gas to 21 lakh houses across 50 districts.
• The PM Ujjwala Yojana aims to achieve a number of important goals, including reducing the health risks associated with cooking with fossil fuels, empowering women by relieving them of the burden of gathering firewood, fostering socioeconomic benefits through productive endeavours, and reducing pollution.The high initial cost of refills, administrative obstacles like data inconsistencies in Aadhar, logistical problems in remote regions, and behavioural issues where individuals continue to burn wood as a cost-saving measure despite having LPG connections are all issues that the programme must deal with.

Different Clean Cooking Methods

• India’s clean-cooking policy must embrace a diverse variety of clean-cooking technologies, moving beyond a sole reliance on LPG, to overcome the obstacles provided by LPG subsidies and price instability. Induction cooktops in particular can considerably reduce the requirement for flame-based cooking.According to a research by the Council on Energy, Environment, and Water (CEEW), electric cooking would still be more affordable than LPG cooking even at a high cost of $8 per unit of electricity.
• Even though there are issues with the rural Indian power grid’s ability to handle all-electric cooking, approximately 10% of urban homes already do so. Urban households can act as early adopters and pave the way for the switch to electric cooking in rural areas.Gradually raising LPG prices over a certain point can induce higher-use groups to move to electric cooking, stimulating the domestic manufacturing ecosystem and generating demand for innovative e-cooking technologies.

Other available fuels for cooking

• Modern and environmentally friendly cooking fuels emit very little pollution when burned. Biogas, LPG, electricity, ethanol, natural gas, and solar power are a few examples (BLEENS).
• A biodigester creates biogas. In this sealed, airtight container, organic waste like food scraps, cow dung, and crop leftovers are fermented. Biogas, a mixture of methane, carbon dioxide, and other trace gases, is created by this process. Making biogas from organic waste improves trash management and improves the environment. It also aids in reducing the effects of climate change. The organic fertiliser it creates is an added bonus. This boosts agricultural productivity and soil health, enhancing food security and nutrition.
• Ethanol is an environmentally friendly fuel made from biomass. It is a renewable energy source. Several low-cost resources, including sugar crops like sugarcane, sugar beetroot, sweet sorghum, and fruits; starch crops like corn, wheat, rice, potatoes, cassava, sweet potatoes, and barley; and lignocellulosic biomass like wood, straw, and grasses, can be used to produce ethanol. To create ethanol, these plant materials are fermented. Even though ethanol is a renewable energy source, its raw materials are not necessarily sustainable. Using resources that are not sustainable can harm the environment.
• Solar cooking involves using a solar oven to cook, heat, or sterilise food and beverages using sun energy. Food is heated in a solar oven using direct sunshine. These gadgets could be exceedingly complicated or simple and low-tech. A solar cooker or solar oven can be used anywhere that receives direct sunshine. Ovens, panel cookers, and parabolic solar cookers are all types of solar cookers.

Supporting the Transition: Business Models and Finance

To guarantee a smooth transition to electric cooking, producers need focused support to adopt efficiency and create solutions specifically for Indian homes. Adoption can be further boosted by the introduction of novel goods, such as combined gas and electric cooktops. Electric cooking can also help to reduce climate pollution by replacing conventional “chulhas” with it. India may now financially support the adoption of e-cooking by poorer rural areas by monetizing the avoided emissions thanks to the recent establishment of the carbon market.

Conclusion

Beyond LPG subsidies, India’s clean-cooking policy has to investigate a wide range of clean-cooking solutions. With the help of focused regulations and creative financing techniques, electric cooking can be a practical replacement for LPG and contribute to India’s environmental and clean cooking goals. India can give its people a sustainable, resilient, and healthy future by accepting a variety of alternatives. It would assure that net zero and SDG-7 would reach a significant milestone

Strengthening U.S.-India Trade: A Road to a Strong Partnership

Context:

On June 22, 2023, Prime Minister Narendra Modi made a momentous State visit to Washington, D.C., which changed the course of India-US relations. The visit emphasised the strategic importance of their alliance, especially in light of the US’ struggle with China, and the Biden administration’s great interest in developing India as a long-term partner. Although improvements have been made in a number of areas, there is still room for improvement in the two countries’ economic and trade ties.

Relevance

GS Paper 2 – International Relations

Mains Question

Examine the importance of the U.S. and India starting FTA discussions to strengthen economic connections and advance bilateral commerce in goods, services, and investments. In order to identify potential benefits and problems in forging a complete FTA between the two countries, consider lessons learned from successful trade agreements like the USMCA and the Australia-India deal. (250 Words

The Expanding U.S.-India Trade Partnership:

The United States cemented its position as India’s most important economic partner during the fiscal year 2023, with bilateral trade surging to an astonishing $128.55 billion. Notably, during the same period, imports from the United States had a stunning increase of around 16%, while exports from India saw a praiseworthy gain of 2.81%. The main exports from India to the United States were a wide variety of products, including petroleum, polished diamonds, pharmaceuticals, jewellery, and frozen prawns. In contrast, significant imports from the United States included necessities like petrol, raw diamonds, liquefied natural gas, and gold. This huge improvement in trade relationships demonstrates the growing economic ties between the two countries and suggests the possibility of future cooperation.

Realising the Potential of Trade:

Despite a significant increase in trade, the U.S.-India economic partnership has not yet reached its full potential. Trade needs to be given a more central and important role in order to fully realise the advantages of this important strategic alliance. India has taken a proactive attitude by pursuing new trade agreements with important international partners and is currently reviewing its long-standing positions. While concurrent discussions with the European Union, the United Kingdom, and Canada are still ongoing, the Indian government recently completed free trade deals with the United Arab Emirates and Australia. This proactive strategy demonstrates India’s commitment to developing strong commercial connections and looking into fresh opportunities for economic cooperation on a global scale.

The American trade strategy:

The Biden administration has changed its position on free trade agreements (FTAs), reshoring, and supporting labour rights and environmentally sustainable production as its main priorities. While some groups have supported this change, detractors contend that it fails to adequately recognise the benefits that FTAs can provide in efficiently achieving these goals. An example of a comprehensive trade agreement that modernised trade relations between the three North American countries is the U.S.-Mexico-Canada Agreement (USMCA). It made it possible to open up more markets, lower trade barriers, and create strict labour and environmental standards.

The Need for Trade Balance Goals:

The U.S. government places a premium on having a harmonic trade policy, which calls for a well-balanced strategy that recognises the strategic significance of the relationship with India without ignoring the trade component. In order to maximise the potential advantages that a free trade agreement (FTA) can provide, it is critical for both countries to look for common ground while traversing the areas of resilient supply chains, labour rights, and climate-friendly production. The U.S.-Mexico-Canada Agreement (USMCA) is a potent illustration of how trade agreements can successfully address various goals while fostering economic growth.

Increasing Trade Relations:

Positive outcomes from the State visit resulted in the settlement of six disputes at the World Trade Organisation. Trade negotiators from both countries should obtain a more ambitious mandate from their governments based on these successes. The progress India has made in forging FTAs with other trading partners is encouraging, and even while these pacts may not perfectly match the U.S. gold standard, the gaps are closing. India’s increasing opening of its agricultural market creates a window for deeper participation and expanded cooperation.

Making Use of FTA Negotiations

Commencing FTA talks have the potential to lead to more comprehensive agricultural agreements and to better trade, investment, and service relations between the US and India. These accords, which can be modelled after the USMCA’s successes, can open up new possibilities and strengthen economic relations. India’s growing market liberalisation and concessions present the possibility of significant benefits, especially in the agricultural industry. Australia’s Economic Cooperation and Trade Agreement with India serves as a compelling example of this, demonstrating the potential of fruitful FTA talks through the achievement of major benefits in each other’s markets.

Exploring Alternatives to Transactional Concessions

The bilateral Trade Policy Forum (TPF) has in fact already contributed to the achievement of transactional concessions between the United States and India in a few industries. A thorough Free Trade Agreement (FTA) nevertheless has the potential to provide a more secure and predictable environment for both businesses and investors. An FTA would promote increased bilateral trade and investment, opening up new channels for economic cooperation and growth by reducing tariffs, streamlining regulations, and enhancing the protection of intellectual property rights.

Navigating Difficulties:

As both nations strive towards a more ambitious trade agenda, it is critical to recognise and address any potential difficulties or worries. Addressing the trade deficit with the United States is one of the most important factors for India. India can concentrate on increasing the value of its exports, encouraging innovation, and broadening its export base to accomplish this. The implementation of these policies may improve India’s exports and promote more equitable and mutually beneficial commercial relations between the two countries.

Conclusion:

The U.S. and India’s expanding strategic cooperation was reinforced during Prime Minister Narendra Modi’s historic State visit to Washington. Trade needs to be given priority in order for this alliance to reach its full potential. It is a good time for FTA negotiations because both nations have shown a readiness to compromise and modify their trade policies. By setting greater goals and strengthening the mandate from both administrations, it will be simple to reach the goal of $500–600 billion in bilateral commerce by 2030. The USMCA offers important insights into how a thorough trade agreement can be advantageous to both parties while addressing various goals. A strong trading connection will surely advance the U.S. and India’s relationship into the twenty-first century as they handle the challenges that lie ahead.