Editorials/Opinions Analysis For UPSC 04 February 2025

Content:

1. Green and clean
2. The kind of jobs needed for the ‘Viksit Bharat’ goal
3. Some wind behind the sails of India’s shipping industry

Green and clean

India’s Clean Energy Transition: Budgetary Trends:

• Significant increase in budget allocation for the Ministry of New and Renewable Energy (MNRE) from ₹1,535 crore (2015) to ₹32,626 crore (2025).
  • Underutilization of funds in most years, leading to lower revised estimates (REs).

Relevance : GS 3(Environment and Minerals)

Practice Question: India has made significant strides in transitioning to renewable energy, but challenges remain in ensuring energy security and reducing dependence on fossil fuels. Discuss the role of critical minerals in India’s energy transition (250 words)

• PM-KUSUM Scheme (2019):
  • Outlay of ₹34,422 crore for off–grid solar irrigation pumps and solar plants on fallow lands.
  • Poor response—installed capacity remains under 0.5 GW.
  • Scheme impacted by COVID–19 and lack of effective implementation.

• COVID-19 & Energy Realization:
  • Supply chain disruptions in coal, oil, and gas highlighted the need for renewable energy security.
  • Led to India’s COP26 pledge (2021) to source 50% of its energy from renewables by 2030.

Policy Shifts & Solar Manufacturing Push

• Production-Linked Incentive (PLI) Schemes:
  • ₹18,100 crore (2021) for advanced chemistry cell battery storage.
  • ₹4,500 crore (2021) for solar photovoltaic modules, increased to ₹19,500 crore (2022).

• Import Dependency & Tariff Barriers:
  • Government imposed 40% Basic Customs Duty (BCD) on solar modules and 25% on solar cells to reduce dependence on China.
  • Outcome: Increased solar prices, slowed solar power installations.

Current Energy Scenario & Grid Storage Challenges

• Renewables Contribution:
  • October 2024: Renewables constitute 46% of total installed capacity.
  • Despite this, 70% of India’s power output still relies on coal due to intermittent RE production.

• Battery Storage Requirement:
  • Grid-scale battery storage is essential for managing fluctuating renewable energy output.
  • Capital-intensive lithium-ion battery sector needs government support to localize production.

India’s Critical Minerals Strategy: The Need for a Framework

• Recent Policy Adjustments:
  • Exemptions: 12 critical minerals and 35 capital goods exempted from BCD to ease imports.
  • Objective: Balance local manufacturing ambitions with affordability and energy security.

• Reducing Chinese Dependence:
  • Energy transition resources (e.g., lithium, rare earth elements) largely sourced from China.
  • India must develop domestic capabilities and diversify supply chains.

• Framework Essentials:
  • Sustainable Extraction: Ensure environmentally responsible mining of critical minerals.
  • Social Equity: Protect indigenous communities affected by mineral extraction.
  • Fair Distribution: Critical minerals should be allocated equitably across sectors.

• Geopolitical Considerations:
  • The U.S. is retreating from global leadership in critical minerals policy.
  • India has an opportunity to fill this gap and lead in sustainable resource governance.

Conclusion: The Way Forward

• Need for a Just Transition Approach: Balancing economic growth, environmental sustainability, and social justice.
• Strengthening Domestic Supply Chains: Investing in exploration, refining, and strategic reserves of critical minerals.

The kind of jobs needed for the ‘Viksit Bharat’ goal

Introduction:

• Union Budget 2024 has introduced Employment Linked Incentives (ELI) to create 4 crore jobs over the next five years with a ₹2 lakh crore outlay.
• The Prime Minister’s internship scheme has gained traction, with 6.21 lakh applications for 1.27 lakh opportunities.
• However, focus needs to expand to the type of jobs to be created, ensuring long-term job creation and real wage growth.

Relevance : GS 2(Governance ), GS 3(Economic Development)

Practice Question: Examine the types of jobs needed for India to achieve its ‘Viksit Bharat’ (Developed India) goal by 2047. Discuss how climate resilience, AI adaptation, and aspiration-centric job creation can play a pivotal role in this vision.(250 Words)

Jobs for Climate Resilience

• India’s Vulnerability to Climate Change:
  • Ranked 7th most affected by climate change in 2019.
  • Income loss of $159 billion in 2021; adaptation costs expected to be near $1 trillion by 2030.
  • Impacts on agriculture, labour productivity, and livelihoods necessitate increased funding for climate adaptation.

• Creating Climate-Resilient Jobs:
  • E-Rickshaw Scheme: Introducing 3-4 state-subsidized e-rickshaws in 6 lakh villages could create 2 million jobs, particularly empowering women.
  • Compressed Biogas Plants: Incentivizing private investment could bridge the gap in biogas plant targets and create employment in rural areas.
  • Non-Fossil Energy Jobs: Accelerating the 500GW non-fossil energy capacity target could create over a million jobs, especially in decentralized and rooftop solar.
  • Long-term Vision: These initiatives could foster rural and urban job growth, enhancing climate resilience.

AI-Resilient Jobs for the Future

• The Challenge of AI and Automation:
  • McKinsey Global Institute forecasts that 50% of Indian jobs may face automation within 10 years, particularly in IT and business services sectors.
  • Generative AI: AI-driven tools like metaGPT and ChatGPT may reduce the demand for certain IT jobs and outsourcing services.
  • The IT sector, which accounts for 70% of India’s services exports, needs to transition to creating more specialized, creative jobs to remain competitive.

• Creating AI-Resilient Jobs:
  • Health and Education Sectors: A massive increase in investment could plug the deficit of healthcare professionals and teachers, ensuring job creation in these critical sectors.
  • National Rural Livelihood Mission: Connecting rural farmers and artisans to global and urban markets, empowering local talent and fostering entrepreneurship.
  • AI-Resilient Workforce: Focus on jobs that combine human creativity and physical engagement (e.g., healthcare, education, rural enterprises).

Aspiration-Centric Jobs for Rural Youth

• Rural Youth’s Aspirations:
  • Despite increased engagement with startup culture, rural youth face barriers such as poor foundational education, insecurity, and limited access to resources.
  • These challenges often push rural youth towards government jobs or “coaching” for competitive exams, creating a dependency culture.

• Boosting Aspirations through Job Creation:
  • Infrastructure Development: Building 70,000 integrated pack-houses to close the 95% infrastructure gap could create over 2 million jobs.
  • Tech-Enabled Rural Manufacturing: Boosting productivity in high-import/export sectors like edible oils could lead to tech-driven, value-added manufacturing.
  • Edible Oil Mission: Reviving rural processing of native oilseeds (e.g., sunflower, soybean) and reducing dependence on imports could enhance economic self-sufficiency and create jobs.
  • Rebranding Rural Jobs: Leveraging technology and social media to make rural jobs more aspirational, reducing the gap between rural aspirations and available opportunities.

Long-Term Structural Reforms for Job Creation

• Key Areas for Reform:
  • Climate-Resilient Jobs: Investments in green energy and rural adaptation.
  • AI-Resilient Jobs: Upskilling and fostering creativity to meet the future demands of the job market.
  • Aspiration-Centric Jobs: Tailoring job creation strategies to the changing aspirations and skillsets of rural youth.

• Strategic Vision for Viksit Bharat:
  • Long-term structural reforms must align with India’s goals of climate resilience, AI adaptation, and empowering rural aspirations.
  • The government must commit to sustained investments in these areas to create a robust and diverse job market.

Conclusion

• Job Creation Beyond Short-Term Measures: While tax relief and short-term measures may boost urban demand, long-term reforms should focus on climate-resilient, AI-resilient, and aspiration-centric jobs.
• Viksit Bharat Vision: A comprehensive approach to job creation can align with India’s broader vision of becoming a developed nation by 2047.

Some wind behind the sails of India’s shipping industry

Context:

The government’s efforts to revitalize India’s maritime sector through investments and reforms are overshadowed by persistent challenges such as stagnation, an aging fleet, tax disparities, and infrastructure limitations that hinder its growth and global competitiveness.

Relevance : GS 2(International Relations) , GS 3(Internal Security)

Practice Question: Analyze the government’s efforts to revitalize India’s maritime sector, focusing on the Sagarmala Programme, challenges in the shipping industry, and policy recommendations. In your opinion, what additional measures are required to ensure the sector’s long-term growth and global competitiveness?(250 Words)

Government Commitment to Maritime Sector:

• The government deserves recognition for its focus on developing the maritime sector, a sector previously neglected by prior administrations.
  • Sagarmala Programme:
    • Total of 839 projects outlined by September 2024 with an investment of ₹5.8 lakh crore by 2035.
    • Key areas of Sagarmala:
      • ₹2.91 lakh crore (50%) for port modernization.
      • ₹2.06 lakh crore (35%) for port connectivity.
      • ₹55.8 thousand crore (10%) for port-led industrialization.

Economic Growth and Maritime Sector:

• India’s GDP rose from ₹153trillion in 2016–17 to ₹272trillion in 2022–23, showcasing a 43% growth over six years.
  • EXIM (exports-imports) trade grew from $66 billion to $116 billion, with a cumulative growth of 77% and an annual growth of 12.83%.
  • Aims to boost exports to $2 trillion by 2030, strengthening India’s global trade position.

Challenges in Shipping Industry:

• Stagnation despite Growth:While GDP and EXIM trade grew, the Indian shipping industry has shown minimal growth.Cargo handling at major ports increased marginally by 14.26%, with a 2.85% annual growth.The number of vessels handled declined by 5.93%, and Indian-flagged ships’ growth has been slow at just 2.4% annually.

• Aging Fleet:Average age of Indian ships was 26 years in 2022-23, though it improved to 21 years with the addition of newer vessels in 2024.India’s global ranking in ship ownership fell from 17th to 19th.

Mismatched Expectations:

• Increased investment in ports has not driven growth in shipping.
  • Indian shipping continues to lose market share to foreign-flagged vessels and alternative modes of transport like rail and road for domestic cargo.

Challenges in Shipbuilding:

• Capital and Financial Constraints:High borrowing costs, rigid collateral requirements, and unfavorable tax laws disadvantage Indian-flagged vessels.Foreign-flagged vessels enjoy easier capital access and fewer regulatory burdens, making them more competitive.

• Infrastructure and Skill Gaps:India’s shipbuilding industry faces inadequate infrastructure, high input costs (e.g., steel), dependency on imports, and weak ancillary industries.Customs duties and skill gaps further hinder shipbuilding efficiency.

Policy Recommendations and Measures:

• The Indian National Shipowners Association has advocated for:
  • Creation of a Maritime Development Fund (MDF).
  • Granting infrastructure status to ships to ease financing.

• Union Budget 2025 included several pro-industry measures:
  • ₹25,000 crore MDF, with 49% contribution from the government.
  • Infrastructure status for large vessels and shipbuilding clusters.
  • Extended duty exemptions and revamped financial assistance policies for shipbuilding.
  • Credit incentives for shipbreaking in Indian yards.

• Challenges with MDF:
  • The ₹25,000 crore allocated may not be sufficient for the maritime sector’s high capital demands.
  • The MDF’s ability to attract external commercial borrowings (ECBs) to lower financing costs could bridge the funding gap.

Tax Disparities:

• The Budget failed to address key tax disparities:
  • Indian-flagged vessels are subjected to 5% IGST on purchase prices, while foreign-flagged vessels are not.
  • Indian shipping companies face TDS obligations on seafarers’ salaries, unlike foreign vessels employing Indian seafarers.

Critical Viewpoint on Budget’s Effectiveness:

• While the Budget includes some positive measures, the maritime industry requires more decisive, strategic reforms.
  • Incremental progress may not suffice to address the long-standing structural issues in the sector.