4 June 2024 : Daily Current Affairs
1. More road projects, higher toll revenue boost the introduction of InvITs
| Topic: GS3 – Indian Economy – Infrastructure – Roads |
| Context |
| ● Investment in road infrastructure in India is on the rise, driven by increased highway development, toll revenue, and toll hikes.
● Infrastructure Investment Trusts (InvITs) are becoming major buyers of road assets, with expectations of doubling asset size and significant growth in the sector’s lending opportunities. |
Analysis of the news:
- The development of highways in FY25, coupled with increased toll revenue and hikes, is attracting investment in road infrastructure in India.
- Road infrastructure investment trusts (InvITs) are gaining traction, with assets expected to more than double in the next three years, creating a ₹1 lakh crore lending opportunity.
| What are Infrastructure Investment Trusts (InvITs)? |
| ● Infrastructure Investment Trusts (InvITs) are investment vehicles that pool funds from investors to invest in infrastructure projects, particularly in sectors like roads, railways, and energy.
● They allow investors to participate in infrastructure projects and earn returns through dividends and capital appreciation. ● InvITs play a crucial role in financing and developing infrastructure by providing long-term funding and facilitating the monetization of operational assets. |
- In FY24, road InvITs controlled over 10,000 km of road length, projected to exceed 22,500 km by FY28.
- InvITs play a crucial role in unlocking capital for road developers once projects become operational.
- PE firm Actis-backed NXT Infra Trust and Roadstar Infra Pvt. Ltd.’s InvIT await regulatory approval.
- Ministry of Road Transport and Highways is expected to award more road projects this fiscal year, with execution anticipated to increase by 5-8%.
- Fastag revenue spiked to ₹65,000 crore in FY24, projected to surpass ₹1 lakh crore annually by FY28.
- NHAI’s announcement of a 5% toll rate raise further boosts revenue visibility.
- Patient capital from pension funds and sovereign funds is crucial due to long-term concession and payback periods in the road sector.
- NHAI’s asset monetization in FY25 could fetch up to ₹60,000 crore, offering a significant funding opportunity for InvITs.
| Role Infrastructure Investment Trusts (InvITs) can play In India: |
| Significance for Development:
● Infrastructure Financing: InvITs provide a mechanism for pooling funds from investors to invest in infrastructure projects, thereby facilitating infrastructure development. ● Long-term Funding: InvITs offer long-term financing solutions for infrastructure projects, reducing dependency on short-term funding sources. ● Unlocking Capital: InvITs enable infrastructure developers to monetize existing assets, releasing capital for new projects and expansion. ● Risk Mitigation: InvITs diversify risk by spreading investments across multiple infrastructure assets, enhancing investor confidence and attracting more capital. Challenges: ● Regulatory Complexity: Regulatory requirements and compliance burdens may deter potential investors and issuers. ● Asset Quality: Ensuring a steady pipeline of high-quality infrastructure assets suitable for InvITs can be challenging. ● Market Volatility: Fluctuations in market conditions and investor sentiment may affect the performance and valuation of InvITs. ● Investor Education: Lack of awareness and understanding among retail investors about InvITs may hinder their adoption. Way Forward: ● Simplification of Regulations: Streamline regulatory processes and reduce compliance burdens to encourage greater participation in InvITs. ● Asset Pipeline Development: Continue efforts to develop a robust pipeline of infrastructure projects suitable for InvITs through government initiatives and private sector partnerships. ● Investor Awareness: Conduct investor education programs to increase awareness and understanding of InvITs among retail investors. ● Risk Mitigation Measures: Implement measures to enhance transparency, governance, and risk management practices within InvITs to improve investor confidence. ● Stimulate Market Demand: Introduce incentives and tax breaks to stimulate demand for InvITs and attract more institutional investors. |
| PYQ: Investment in infrastructure is essential for a more rapid and inclusive economic growth. Discuss in the light of India’s experience. (250 words/15m) (UPSC CSE (M) GS-3 2021) |
| Practice Question: How can Infrastructure Investment Trusts (InvITs) contribute to the development and financing of road infrastructure projects in India? Discuss their significance. (250 Words /15 marks) |
(Source – The Hindu, International Edition – Page No. – 4
2. Analyzing India’s Agrarian Landscape: The Path from Farmer Protests to Improved Agricultural Performance under Modi 2.0
| Topic: GS3 – Indian Economy – Agriculture |
| Context: |
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Analysis of News:
Modi Government’s First Term (2014-2019):
- The first term of the Modi government saw considerable farmer unrest due to declining crop production and price collapses, exacerbated by the November 2016 demonetisation.
- This period also experienced the crash in global agri-commodity prices post-2014.
- To address these issues, the government increased MSP and initiated the Pradhan Mantri Kisan Samman Nidhi scheme, which provided annual cash transfers to land-holding farmer families.
Improved Agricultural Performance in Modi 2.0:
Growth Rates and Rainfall
- The average annual growth of the agriculture sector from 2019-20 to 2023-24 was 4.2%, a notable increase from the 3.2% average during Modi 1.0.
- Furthermore, the crops sub-sector saw a growth rate of 4% in Modi 2.0, compared to 0.3% in Modi 1.0.
- Only one year (2023-24) in Modi 2.0 recorded a failure of rainfall, as opposed to three years (2014-15, 2015-16, and 2018-19) during Modi 1.0.
- These years were marked by El Niño events, which adversely affected rainfall patterns in India.
Price Realisations and Exports
- During Modi 2.0, farmers benefited from better price realisations. The UN’s Food and Agriculture Organization’s food price index showed a significant recovery, averaging 133.2 points in 2021-22 and 140.8 points in 2022-23, up from a low of 90 points in 2015-16 during Modi 1.0.
- High international prices led to record agricultural exports, which reached $50.2 billion in 2021-22 and $53.2 billion in 2022-23.
- Consequently, domestic farm realisations improved, with the wholesale price index for “food articles” rising by an average of 6% during Modi 2.0, compared to 3% in Modi 1.0.
Comparing Modi Government with UPA:
Agricultural Growth Rates
- The average annual growth of the farm sector during the Modi government (3.7%) slightly surpassed that of the previous Congress-led United Progressive Alliance (UPA) regime (3.5%).
- However, this growth has been primarily driven by animal husbandry rather than crop agriculture.
- The growth rate for crop agriculture, including horticulture, has fallen to less than 2% annually under the Modi government, compared to 3.4% during the UPA period.
Market-Driven Sub-Sectors
- The livestock and fisheries sub-sectors have shown much higher growth rates in the last 10 years compared to the UPA years.
- This trend aligns with rising household consumption of animal products and horticulture produce.
- In contrast, the benefits of MSP have largely been restricted to non-horticultural crops like rice, wheat, sugarcane, cotton, and a few pulses and oilseeds.
- The demand for statutory MSP is primarily coming from farmers of these crops.
Policy Implications and Future Directions:
Divergence in Growth Drivers
- The divergence between policy-driven and market-driven sub-sectors in agriculture raises important policy questions.
- The sustained growth in livestock, fisheries, and horticulture sectors has been market-driven, while the demand for MSP support continues from non-horticultural crop farmers.
Future Agricultural Policies
- Addressing this divergence and ensuring balanced growth across all agricultural sub-sectors will be crucial.
- Policies need to be tailored to support the growing sectors while also addressing the needs of traditional crop farmers.
- Additionally, the impact of global commodity prices, climate change, and domestic policy measures will play significant roles in shaping the future of Indian agriculture.
| Practice Question: Discuss the impact of the agricultural reforms and policies implemented during the second term of the Narendra Modi government on agrarian distress and agricultural growth in India. (250 words/15 m) |
(Source: Indian Express; Section: Explained; Page: 14)
3. Private Space Race: Agnikul Cosmos Launches Agnibaan Rocket, Paving the Way for Commercial Satellite Missions
| Topic: GS3 – Science & Technology – Achievements of Indian S&T; Indigenization of technology |
| Context: |
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Analysis of News:
Building on Previous Successes:
- This launch was not the first instance of an Indian private company launching a rocket. In November 2022, Skyroot Aerospace, another start-up, successfully launched its Vikram rocket.
- The successful launch of Agnikul’s Agnibaan rocket further demonstrates the growing capabilities and ambitions of private space companies in India.
- Both companies aim to begin commercial satellite launches within a year, indicating a robust pipeline of space missions ahead.
Targeting the Small Satellite Market:
- Agnikul’s Agnibaan rocket, like Skyroot’s Vikram, is designed to cater to the small satellite market, which is experiencing rapid growth. These rockets are capable of carrying payloads ranging from 30 kg to 300 kg to lower earth orbits.
- Small satellites have a variety of applications in communications, broadcasting, disaster management, climate change monitoring, earth and ocean observation, urban planning, and surveillance.
- This sector is crucial for meeting the increasing demand for space-based services and applications.
Technological Innovations:
- Agnibaan’s uniqueness lies in its semi-cryogenic engine, Agnilet, which is entirely 3D printed.
- This engine has no components, moving parts, joints, welding, or fusing, making it a single piece of hardware.
- While the use of 3D printing in space hardware is not new, the development of a fully 3D-printed engine is a pioneering achievement.
- This innovation increases efficiency, reduces costs, and minimizes the probability of errors, enhancing the overall reliability of the rocket.
Private Launchpad: A First for India:
- Agnikul’s launch from a privately owned launchpad at ISRO’s Sriharikota facility is a significant milestone.
- Traditionally, all space launches in India have been conducted from ISRO’s launch pads.
- The establishment of a private launchpad provides Agnikul with greater flexibility in scheduling its launches.
- With the potential for a sharp rise in space launches, ISRO is also developing a second spaceport in Kulasekarapattinam, Tamil Nadu, primarily for SSLV launches.
The Rise of Private Players in India’s Space Sector:
- Agnikul and Skyroot are part of a broader trend of increasing private participation in India’s space sector.
- Numerous private space companies have emerged in recent years, covering various segments such as satellites, space-based applications, hardware, communications, and data centers.
- The government is heavily promoting this sector, with Prime Minister Modi holding several meetings with space entrepreneurs.
- The inclusion of private players has made space a sunrise sector with significant growth potential.
Government Support and International Outreach:
- The Indian government is actively supporting the space sector’s growth, seeing it as a key area for technological advancement and economic development.
- Space has become a crucial part of India’s diplomatic outreach, inviting international companies to utilize India’s space capabilities and invest in the sector.
- This strategic push aims to position India as a major player in the global space market, leveraging its technological advancements and entrepreneurial spirit.
Conclusion:
- The successful launch of Agnikul Cosmos’s Agnibaan rocket marks a pivotal moment in India’s space sector, highlighting the growing role of private companies.
- With significant technological innovations and government support, India is well on its way to becoming a major player in the global space industry.
- The rise of private space companies like Agnikul and Skyroot signals a promising future for India’s space ambitions, fostering innovation and expanding the country’s capabilities in space exploration and satellite services
| Practice Question: Discuss the significance of the recent achievements of private space companies in India, highlighting their impact on the country’s space sector and the role of government support in fostering their growth. (250 words/15 m) |
(Source: Indian Express; Section: Explained; Page: 14)
PRELIMS FACTS
1. Claudia Sheinbaum Makes History as Mexico’s First Female President in Landmark Election Victory
| Context: |
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Analysis of News:
Historic Moment and Gender Representation:
- Sheinbaum’s triumph represents a significant milestone for Mexico, a country with a traditionally macho culture, and makes her the first woman to win a general election in North America.
- While Sheinbaum has vowed to address security issues, details remain scarce, and the election’s backdrop of violence underscores the pressing challenges of crime and insecurity she faces as president.
- Additionally, negotiations with the US over immigration and drug trafficking pose further diplomatic hurdles.
2. ISRO develops new PraVaHa software for aerodynamic design
| Context |
| ● ISRO’s Vikram Sarabhai Space Centre develops PraVaHa, a Computational Fluid Dynamics software, enabling precise aerothermal analysis for aerospace vehicles like launch and re-entry vehicles.
● It’s vital for designing structures and Thermal Protection Systems. PraVaHa plays a crucial role in ISRO’s Gaganyaan program, ensuring safety and efficiency. |
Analysis of the news:
- PraVaHa: Parallel RANS Solver for Aerospace Vehicle Aero-thermo-dynamic Analysis.
- Developed by ISRO’s Vikram Sarabhai Space Centre (VSSC).
- Facilitates simulation of external and internal flows on various aerospace vehicles.
- Capable of analysing launch vehicles, winged and non-winged re-entry vehicles.
- Crucial for evaluating aerodynamic and aerothermal loads during launch and re-entry.
- Essential for designing vehicle shape, structure, and Thermal Protection Systems (TPS).
- Handles unsteady aerodynamics, addressing flow issues and acoustic noise.
- Utilised extensively in ISRO’s Gaganyaan program for human-rated launch vehicles analysis.
- Currently operational for simulating Perfect Gas & Real Gas conditions.
- Ongoing validations for simulating chemical reactions during air dissociation and combustion, crucial for scramjet vehicles.
(Source – The Hindu, International Edition – Page No. – 3)
3. JWST spots oldest galaxy yet, from cosmic dawn
| Context |
| ● NASA’s James Webb Space Telescope (JWST) has discovered JADES-GS-z14-0, the earliest-known galaxy, challenging previous understandings of early galaxy formation.
● This galaxy, observed just 290 million years after the Big Bang, is surprisingly luminous and large, prompting new questions about the universe’s infancy and early galaxy evolution. |
Analysis of the news:
- NASA’s James Webb Space Telescope (JWST) discovers earliest-known galaxy, JADES-GS-z14-0, just 290 million years after the Big Bang.
- Surprisingly luminous and large for its age, challenging previous notions of early galaxy formation.
- Measures about 1,700 lightyears across, with a mass equivalent to 500 million Sun-sized stars.
- Rapidly forming new stars, around 20 per year, suggesting vigorous star formation during the early universe.
- Previous earliest-known galaxy dated to about 320 million years after the Big Bang.
- Discovery made by JWST Advanced Deep Extragalactic Survey (JADES) research team.
- Astrophysicists amazed by the unexpected brightness and size of JADES-GS-z14-0, prompting new questions about early galaxy evolution.
James Webb Space Telescope (JWST):
- James Webb Space Telescope (JWST) is NASA’s premier observatory, set to revolutionise understanding of the cosmos.
- Equipped with a 6.5-meter primary mirror, JWST will observe in infrared wavelengths, enabling deep space exploration.
- Designed to study the early universe, exoplanets, and star formation, JWST will unveil mysteries beyond Hubble’s reach.
- Operates at the Earth-Sun L2 Lagrange point, ensuring minimal interference from Earth’s atmosphere and heat.
- Collaboration between NASA, ESA, and CSA, JWST represents a milestone in international space exploration efforts.
- Expected to provide groundbreaking insights into the universe’s origins, evolution, and potential for life beyond Earth.
(Source – The Hindu, International Edition – Page No. – 4)
