Daily Prelims Notes 11 January 2021
- January 11, 2021
- Posted by: OptimizeIAS Team
- Category: DPN
Daily Prelims Notes 11 January 2021
By
Santosh Sir
All 6 Prelims qualified
4 CSE Mains qualified
If I can do it, you can too
Table Of Contents
- Expenditure budget
- Lithium reserve found in India
- Gas pipeline from Kochi to Bengaluru
- Black Box in flight
- Corporate Average Fuel Efficiency/Economy regulations (CAPE)
- Pre-pack
- VANADIUM
- INVERTED DUTY STRUCTURE
- Excise Duty
Subject: Indian Budgeting
Context: Government looks at expenditure budget to revive growth.
Concept:
- With less than 1.5% of GDP as additional spending in pandemic year government has significant scope for spending as recent green shoots in economy if supported by further public investment can help the growth of the economy.
- British economist John Maynard Keynes had argued that free markets cannot be relied upon to fuel GDP growth when there is a recession, of the kind India and the world, has witnessed in 2020 following the Covid-19 pandemic.
- India witnessed contraction of discretionary expenditure by consumer leading to fall in demand and hence private sector investing less. Thus, it necessitates more spending by the government.
About expenditure budget:
- Expenditure budget provides all the information about the total finance of the Union in a financial year.
- It divides expenditure in two parts: capital expenditure and revenue expenditure. While the former results in the creation of a physical asset or investment, the latter comprises mainly operational expenses such as payment of wages, pensions, subsidies, and interest.
- Revenue expenditure does not lead to any asset creation or reduction of liabilities. Whereas capital expenditure yields asset or invested in sectors which will yield dividend in future (Ex- Skill).
- Expenditure budget has two components:
- Charged expenditure: According to Article 112 (3) and Article 202 (3) of the Constitution of India, certain expenditure does not require a vote and is charged to the Consolidated Fund. They include:
Salary, allowances and pension for the President as well as Governors of States, Speaker and Deputy Speaker of the House of People, the Comptroller General of India and Judges of the Supreme and High Courts.
They also include interest and other debt related charges of the Government and any sums required to satisfy any court judgment pertaining to the Government.
- Voted expenditure: Other revenue and capital expenditure which need approval of the Lok Sabha.
- The information about both capital and revenue expenditure is further given in two separate categories as charged and voted expenditure as per the requirement of voting in the Lok Sabha.
- The demands for grants in budget include both charged and voted expenditure.
2. Lithium reserve found in India
Subject: natural resources
Context: Atomic Minerals Directorate for Exploration and Research (AMD) survey estimates the presence of 1,600 tonnes of lithium resources in the igneous rocks of the Marlagalla-Allapatna region of Karnataka’s Mandya district
Concept:
- Lithium is a silver white and alkali metal i.e., Alkali metal are any of the six chemical elements that make up Group 1 (Ia) of the periodic table—namely, lithium (Li), sodium (Na), potassium (K), rubidium (Rb), cesium (Cs), and francium (Fr). The alkali metals are so called because reaction with water forms alkalies (i.e., strong bases capable of neutralizing acids).
- AMD is carrying out surface and sub-surface exploration for lithium in potential geological domains of the country.
- Lithium-ion rechargeable batteries powering electric vehicles (EVs), laptops and mobile phones etc. has led to a “lithium rush” in the world i.e., Acquiring constant supply of lithium for these sensitive sectors.
- India’s strategy has been to have share in global value chain by: 1) Domestic exploration 2) Deals and joint ventures with the Lithium triangle countries.
About Lithium Triangle:
LITHIUM TRIANGLE – Optimize IAS
3. Gas pipeline from Kochi to Bengaluru
Subject: Economy
Context: Prime Minister Narendra Modi dedicated to the nation the Kochi-Mangaluru natural gas pipeline of the Gail Authority of India Limited (GAIL).
Concept:
- It is South India’s first LNG-receiving, regasification and re-loading terminal with a capacity of five million metric tonnes per annum.
- It will deliver liquefied natural gas (LNG) sourced from a terminal in Kochi to region.
- It is part of the project in existence since 2007 and envisages pipelines from Kochi to Mangaluru and to Bengaluru (delayed due to protests in Kerala).
- First phase saw laying of infrastructure in Kochi and in second phase which completed extended it to Mangaluru and work on connecting Bengaluru is going on.
- It seeks to supply LNG to industrial and residential customers.
Subject: Science & Technology
Context: Black boxes located at Indonesian airliner crash site as human remains recovered.
Concept:
- It is also called flight data recorder or cockpit voice recorder and it stores data about planes.
- They reveal information which leads to information about the accidents of flight.
- There are two different flight recorder devices the flight data recorder (FDR) preserves the recent history of the sounds in the cockpit, including the conversation of the pilots.
- These can also be combined into a single unit.
- These boxes are of a size of a shoe.
- It is compulsory on every commercial flight or corporate jet, and are mostly on tail of aircraft.
- FDR records airspeed, altitude, vertical acceleration and fuel flow and can store data of 25 hours.
- The CVR records the conversation between the pilots as well as with air travel control tower.
- Once black box crashes into water, the beacon sends out an ultrasonic pulse that is detectable by sonar and audio equipment to depths to approximately 14000 feet.
- These black boxes are of fluorescent flame-orange (makes it more visible) in colour and not black and was used for the first time during World War 2 with the development of radio, radar and electronic navigations.
5. Corporate Average Fuel Efficiency/Economy regulations (CAPE)
Subject: Economy
Context: Automakers seek relief on new fuel efficiency, emission norms like CAPE, BS-6 norms.
Concept:
- It seeks to achieve emission norms as part of climate change commitments by mandating norms to be adopted by automotive sectors.
- It seeks to lower fuel consumption (or improving fuel efficiency) of vehicles by lowering carbon dioxide (CO2) emissions, thus serving the twin purposes of reducing dependence on oil for fuel and controlling pollution.
- Corporate average here refers to sales-volume weighted average for every auto manufacturer.
- CAFÉ norms are applicable to petrol, diesel, LPG and CNG passenger vehicles.
- It came into force in India from April 1, 2017.
- It mandates must be less than 130 gm per km till 2022 (10% fuel efficiency) and below 113 gm per km thereafter (30% efficiency).
Significance:
- It can complement government efforts to boost electric vehicles sales through:
- FAME scheme
- BS 6 norms from April 2020 (Focus on other exhausts which are harmful like SO2, NO2)
- Plan to shift to EVs by 2030.
6. Pre-pack
Subject: Economy
Context: According to the report submitted by the panel headed by Insolvency and Bankruptcy Board of India chairman M S Sahoo, the ‘pre-pack’ insolvency scheme will be available for any stress i.e., pre-default and post-default.
Concept:
- The scheme is sought to be put in place to for the identification of stress in the banking system, facilitate fast resolution of bad loans before the debtor faces substantial value erosion and reduce costs and litigation.
- This seeks to ensure resolution of the debt of a distressed company.
- It seeks to do it through an agreement between investors and secured creditors unlike public bidding process in IBC.
- It has a time limit of 90 days and 30 days for plan to be approved by NCLT.
Sahoo panel recommendations on ‘pre-pack’
- Implementation may be phased, starting with defaults from Rs 1 lakh to Rs 1 cr and Covid defaults
- Eligible promoters to retain control of debtors
- Usually, promoters will submit a base plan, which will face Swiss challenge
- No liquidation for defaults below Rs 1 cr and Covid-19 defaults
- Resolution plan to be submitted in 90 days; NCLT to approve it in 30 days
- IBC may be amended quickly to roll out pre-pack, preferably by an Ordinance
Why pre-pack schemes?
- Much faster: Current IBC process takes almost 270 days for corporate insolvency resolution.
- Reduce litigation: As basis is prior consultation mong stakeholders.
7. VANADIUM
Subject: Geography
Context:
Exploration being carried out by Geological Survey of India (GSI) has placed Arunachal Pradesh on the vanadium map of the country.
Concept:
- Vanadium is a chemical element with the symbol V and atomic number 23.
- It is a hard, silvery-grey, malleable transition metal.
- The elemental metal is rarely found in nature, but once isolated artificially, the formation of an oxide layer (passivation) somewhat stabilizes the free metal against further oxidation.
Deposits over world countries:
- Vanadium occurs naturally in about 65 minerals and in fossil fuel deposits.
- It is produced in China and Russia from steel smelter slag.
- Other countries produce it either from magnetite directly, flue dust of heavy oil, or as a byproduct of uranium mining.
Uses of Vanadium:
- Vanadium alloys are durable in extreme temperature and environments, and are corrosion-resistant.
- Its addition improves the tensile strength of steel and of reinforcing bars used for buildings, tunnels and bridges.
- vanadium, a high-value metal used in strengthening steel and titanium.
- It is mainly used to produce specialty steel alloys such as high-speed tool steels, and some aluminium alloys.
- The most important industrial vanadium compound, vanadium pentoxide, is used as a catalyst for the production of sulfuric acid.
- Apart from increasing fuel-efficiency in automotive and aviation industries due to its high strength-to-weight ratio, the metal forms the integral part of vanadium redox batteries that have the least ecological impact in energy storage.
Toxicity:
- Large amounts of vanadium ions are found in a few organisms, possibly as a toxin. The oxide and some other salts of vanadium have moderate toxicity.
- Particularly in the ocean, vanadium is used by some life forms as an active center of enzymes, such as the vanadium bromoperoxidase of some ocean algae.
About the findings in India:
The expected grade of vanadium mineralisation in Arunachal Pradesh is comparable to the important vanadium deposits of the world. The largest deposits are in China, followed by Russia and South Africa,” according to the specialists.
Subject: Economy
Context:
Budget may try to straighten ‘inverted duty’ structure to reduce its impact on the domestic industry.
Concept:
The inverted duty structure denotes prevalence of higher taxes on inputs than on finished items.
Impacts of Inverted Duty Structure:
According to FICCI, Inverted customs duty structure on finished goods is eroding competitiveness of the manufacturing sector and discouraging domestic value addition, as the same tariff on the raw material or intermediate product is lower.
9. Excise Duty
Subject: Economy
Concept:
Excise duty is a form of tax imposed on goods for their production, licensing and sale. An indirect tax paid to the Government of India by producers of goods, excise duty is the opposite of Customs duty in that it applies to goods manufactured domestically in the country, while Customs is levied on those coming from outside of the country.
Union Excise Duty: This is a duty on manufactured goods, which is levied at the time of manufacture.
Union Excise Duty and GST: Excise duty is imposed in addition to an indirect tax such as goods & services tax (GST), sales tax or value-added tax (VAT).
Eg: Petrol and Diesel
The Budget estimate of the government’s excise duty revenue for the year 2020-21 was Rs 2,67,000 crore. The revised estimates of excise duty for the 2019-20 Budget came at Rs 2,48,000 crore, while the actuals for the 2018-19 Budget stood at Rs 2,30,992 crore.