Articles on 2 January 2025

What’s in today’s article?

• Why in News?
• Key Decision of the Union Cabinet
• Fertilizer Price Dynamics
• Challenges for the Fertilizer Industry
• Government’s Strategy
• Future Outlook

Why in News?

• Cabinet approves extension of One-time Special Package on Di-Ammonium Phosphate (DAP) beyond the NBS subsidy for the period from 01.01.2025 till further orders to ensure sustainable availability of DAP at affordable prices to the farmers.

Key Decision of the Union Cabinet:

• Extension of subsidy: The Centre has extended the Rs 3,500 per tonne special subsidy on di-ammonium phosphate (DAP) for one more year, effective from January 1, 2025, to December 31, 2025.
• Objective: The decision aims to stabilize farmgate prices and shield farmers from price volatility caused by the rupee's depreciation against the US dollar.

Fertilizer Price Dynamics:

• MRP caps on fertilizers:
  • The Modi government has informally frozen the maximum retail price (MRP) of non-urea fertilizers despite their decontrolled status.
  • Current MRPs:
    • DAP: Rs 1,350 per 50-kg bag
    • Complex fertilizers: Rs 1,300 to Rs 1,600 per bag, depending on the composition.
  • The government’s subsidy on DAP is Rs 21,911 per tonne, along with the Rs 3,500 special concession.
• Impact of currency depreciation:
  • The rupee’s fall against the dollar has raised the cost of imported fertilizers.
  • Current import costs:
    • Landed price of DAP: Rs 54,160 per tonne, up from Rs 52,960 three months ago.
    • Total cost after additional expenses (e.g., customs, handling, and dealer margins): Rs 65,000 per tonne.

Challenges for the Fertilizer Industry:

• Viability concerns:
  • Fertilizer companies face unviable import economics unless:
    • The government increases subsidies.
    • Companies are allowed to revise MRPs upward.
  • Even with the extended subsidy, companies estimate a shortfall of Rs 1,500 per tonne due to currency depreciation.
• Stock levels:
  • Current stocks of DAP (9.2 lakh tonnes) and complex fertilizers (23.7 lakh tonnes) are below last year’s levels.
  • Insufficient imports may lead to supply challenges for the next kharif season (June-July 2025).

Government’s Strategy:

• Compensation for imports:
  • On September 20, 2024, the government approved compensation for DAP imports above a benchmark landed price of $559.71 per tonne.
  • However, these calculations were based on an exchange rate of Rs 83.23 per dollar, which has since fallen below Rs 85.7.
• Fiscal implications:
  • The extended subsidy will cost the government an additional Rs 6,475 crore.
  • Any MRP hike is expected to have minimal political implications, given that major agriculture states are not going to polls soon and the current DAP consumption season is over.

Future Outlook:

• Immediate priority: Ensuring adequate fertilizer availability for the kharif season by securing imports of both finished fertilizers and raw materials.
• The government’s ability to balance fiscal constraints, industry viability, and farmer affordability will be critical in the coming months.

Q.1. What is nutrient based subsidy (NBS)?

NBS is a government policy that provides subsidies for fertilizers based on their nutrient content. The policy was introduced in 2010 to improve agricultural productivity, ensure food security, and balance fertilizer use.

Q.2. What is Di-Ammonium Phosphate (DAP)?

DAP is a fertilizer that is made from a reaction of phosphoric acid and ammonia and is a primary source of nitrogen and phosphorus for plants. It is the most widely used phosphorus fertilizer in the world.

Source: IE

What’s in today’s article?

• Why in the News?
• Background
• Addressing Caste-Based Discrimination in Prisons
• Redefining Habitual Offenders
• Significance of the Amendments
• Conclusion

Why in the News?

• The Union Home Ministry has introduced significant amendments to the Model Prison Manual, 2016, and the Model Prisons and Correctional Services Act, 2023.
• The Amendments are aimed at addressing caste-based discrimination and refining the definition and treatment of habitual offenders in Indian prisons.

Background

• The Supreme Court, in its October 3, 2024 ruling, highlighted the persistence of caste-based discrimination and inconsistencies in defining habitual offenders across states.
• It directed governments to update their legal frameworks and ensure equality and fairness in prison administration.
• This judgment forms the basis for the Home Ministry’s comprehensive overhaul of prison rules.

Addressing Caste-Based Discrimination in Prisons

• To eradicate caste-based discrimination within prisons, the following changes have been implemented:
• Prohibition of Discrimination:
  • Prison authorities are now mandated to ensure there is no discrimination, classification, or segregation of prisoners based on their caste.
  • Duties and work assignments within prisons must be allocated without prejudice, promoting equal treatment for all inmates.
• Legal Provisions in Prison Rules:
  • A new section, 55(A), titled ‘Prohibition of caste-based discrimination in Prisons and Correctional Institutions,’ has been added under the Miscellaneous category of the Model Prisons and Correctional Services Act, 2023.
  • This ensures a codified framework to eliminate caste-based practices.
• Implementation of Manual Scavenging Prohibition:
  • The provisions of the Prohibition of Employment as Manual Scavengers and their Rehabilitation Act, 2013, have been extended to prisons and correctional institutions.
  • Manual scavenging and hazardous cleaning of sewers or septic tanks within prisons are explicitly prohibited, safeguarding inmates from degrading practices.

Redefining Habitual Offenders

• The amendments also address the treatment and classification of habitual offenders, following Supreme Court directives to standardize definitions and ensure adherence to constitutional principles:
• Unified Definition:
  • A habitual offender is now defined as an individual who, during any continuous period of five years, has been convicted and sentenced to imprisonment on more than two occasions for offences committed on different occasions (not part of the same transaction), provided these sentences are not overturned on appeal or review.
  • Time spent in jail under sentence or detention will not be included in the five-year period.
• Legislative Consistency:
  • In states lacking specific Habitual Offenders Acts, the Union and state governments are required to align their prison manuals and rules with the Supreme Court’s judgment within three months.
  • The amendments aim to create consistency across jurisdictions by replacing varied state definitions of habitual offenders with a standard model.

Significance of the Amendments

• Ensuring Equality:
  • The amendments aim to uphold the constitutional right to equality and dignity for all prisoners, irrespective of their caste or background.
• Eliminating Degrading Practices:
  • By prohibiting manual scavenging and hazardous cleaning, the rules reinforce humane treatment within prisons.
• Standardized Framework:
  • The unified definition of habitual offenders ensures consistent treatment of repeat offenders across states, avoiding arbitrary classifications.

Conclusion

• These amendments mark a significant step toward ensuring a fair and non-discriminatory prison environment.
• By addressing caste-based discrimination and aligning the treatment of habitual offenders with constitutional principles, the Union Home Ministry aims to create a more just and equitable correctional system.
• These changes reflect India's commitment to human rights and the rule of law, setting a progressive precedent for prison reforms nationwide.

Q1. Is the police under central or state?

'Police' and 'Public Order' are State subjects under the Seventh Schedule to the Constitution of India and therefore, it is the primary duty of the State Governments to prevent, detect, register and investigate crime and prosecute the criminals.

Q2 What is Central Industrial Security Force?

The Central Industrial Security Force is a federal police organisation in India under the Ministry of Home Affairs. It is one among the Central Armed Police Forces. CISF provides security to over 356 industrial units, government infrastructure projects and facilities and establishments located all over India.

Source: IE | TH

What’s in today’s article?

• Why in News?
• Pradhan Mantri Fasal Bima Yojana (PMFBY)
• Key features of the PMFBY
• Restructured Weather-Based Crop Insurance Scheme
• Crop insurance scheme gets Rs 69,515 crore boost

Why in News?

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the continuation of the Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Restructured Weather-Based Crop Insurance Scheme until 2025-26. 

The schemes have been allocated an enhanced outlay of ₹69,515.71 crore for the period 2021-22 to 2025-26.

Pradhan Mantri Fasal Bima Yojana (PMFBY)

• About:
  • A scheme of the Ministry of Agriculture & Farmers Welfare, PMFBY is an insurance service for farmers for their yields, launched in 2016.
  • The new Crop Insurance Scheme is in line with the One Nation One Scheme theme.
  • The PMFBY replaced the previous two schemes: the National Agricultural Insurance Scheme (NAIS) and the Modified NAIS. 
  • It has incorporated the best features of all previous schemes while eliminating all previous shortcomings.
• Objectives:
  • To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests and diseases.
  • To stabilise the income of farmers to ensure their continuance in farming.
  • To encourage farmers to adopt innovative and modern agricultural practices.
  • To ensure flow of credit to the agriculture sector.

Key features of the PMFBY

• Premium rates
  • There will be a uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops (winter sown). 
  • In case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5%. 
• Area based approach
  • The Scheme will be implemented on an 'Area Approach basis,' i.e., Defined Areas for each notified crop for widespread calamities, 
  • The unit of insurance shall be Village/Village Panchayat level for major crops and for other crops it may be a unit of size above the level of Village/Village Panchayat.
  • It is assumed that all insured farmers in a unit of insurance, to be defined as a "Notified Area" for a crop, face similar risk exposures.
• No upper limit to subsidy
  • There is no upper limit on Government subsidy. This means, even if the balance premium is 90%, it will be borne by the Government.
• Use of technology
  • The use of technology will be encouraged to a great extent. For example, 
    • Smartphones will be used to capture and upload data of crop cutting to reduce the delays in claim payment to farmers. 
    • Remote sensing will be used to reduce the number of crops cutting experiments.
• Beneficiaries to be covered
  • All farmers growing notified crops in a notified area during the season who have insurable interest in the crop are eligible.
  • To address the demand of farmers, the scheme has been made voluntary for all farmers from Kharif 2020.
    • Earlier, the enrolment was compulsory for farmers who possess a Crop Loan account or Kisan Credit Card (KCC) account, etc).

Restructured Weather-Based Crop Insurance Scheme (RWBCIS)

• RWBCIS was introduced by the Government of India in 2016 to safeguard farmers against financial losses caused by unfavourable weather conditions. 
• These conditions encompass factors such as rainfall, temperature, wind, and humidity.
• The scheme offers coverage for a range of crops, including food crops, oilseeds, and commercial or horticultural crops. 
• Its primary objective is to provide comprehensive insurance protection for various perils like drought, flood, cyclone, and hailstorm, thereby mitigating the impact of crop damage on farmers.
• Eligibility - All farmers, including sharecroppers and tenant farmers, growing notified crops in notified areas.

Crop insurance scheme gets Rs 69,515 crore boost

• Continuation of PMFBY and RWBCIS till 2025-26
  • The Union Cabinet approved the continuation of the PMFBY and the RWBCIS until 2025-26, with an enhanced outlay of ₹69,515.71 crore for the period 2021-22 to 2025-26.
• Risk Coverage and Technology Infusion
  • The schemes aim to provide risk coverage for crops against non-preventable natural calamities. 
  • To increase transparency and efficiency in claim calculation and settlement, the Cabinet approved the creation of the Fund for Innovation and Technology (FIAT) with a corpus of ₹824.77 crore.
• Technological Initiatives under FIAT
  • Yield Estimation System using Technology (YES-TECH):
    • Utilizes Remote Sensing Technology for yield estimation, with at least 30% weightage to technology-based estimates.
    • Currently implemented in 9 states, with efforts to onboard others.
    • Madhya Pradesh has adopted 100% technology-based yield estimation, eliminating the need for Crop Cutting Experiments.
• Weather Information and Network Data Systems (WINDS):
  • Plans to establish Automatic Weather Stations (AWS) at the block level and Automatic Rain Gauges (ARGs) at the Panchayat level.
  • Aims to increase network density fivefold for hyper-local weather data.
  • WINDS implementation starts in 2024-25, with states like Kerala, Uttar Pradesh, and Himachal Pradesh participating.
• Special Provisions for Northeastern States
  • The Centre will share 90% of the premium subsidy for Northeastern states.
  • Flexibility is provided to reallocate funds to other development projects if required due to low gross cropped area or voluntary participation.
• Key Benefits
  • Enhanced risk coverage for farmers across India.
  • Transition to technology-based systems for increased accuracy and transparency.
  • Support for Northeastern farmers with higher subsidy sharing.

Q.1. What are the key features of PMFBY?

PMFBY offers a uniform premium rate (2% for Kharif, 1.5% for Rabi, and 5% for horticulture crops), no upper limit on subsidies, and uses technology like remote sensing for crop yield estimation. Farmers growing notified crops in specified areas are eligible.

Q2. What is the role of FIAT in crop insurance schemes?

The ₹824.77 crore Fund for Innovation and Technology (FIAT) facilitates transparency in claim settlement using initiatives like YES-TECH for remote yield estimation and WINDS for hyper-local weather data, benefiting Indian farmers.

Source: IE | PIB | Vikaspedia

What’s in today’s article?

• Why in News?
• Urengoy-Pomary-Uzhgorod Pipeline Overview
• Volume of gas supplied through Ukraine
• Possible impact
• Options available to the buyers

Why in News?

On New Year’s Day, Russian natural gas exports to Europe via Soviet-era pipelines through Ukraine were stopped as the transit deal expired, with no agreement reached between Moscow and Kyiv. This marks the end of Russia’s oldest gas route to Europe.

The Ukrainian government justified its decision as necessary for national security amid the military conflict.

Urengoy-Pomary-Uzhgorod Pipeline Overview

• The pipeline transports gas from Siberia through Sudzha, located in Russia's Kursk region, now under Ukrainian military control.
• It flows through Ukraine to Slovakia, branching into the Czech Republic and Austria.
• Transdniestria, bordering Ukraine, receives Russian gas via Ukraine.

Volume of gas supplied through Ukraine

• Decline in Russia's Gas Exports to Europe
  • Russia's gas supply to Europe has drastically reduced since the invasion of Ukraine in February 2022.
  • Moscow's share of the European gas market, once 35%, has dropped to 8%.
• Diminished Gas Transit via Ukraine
  • By December 2024, the EU received less than 14 bcm of gas via Ukraine, a sharp decline from 65 bcm/year in 2020.
  • Ukraine earns $800 million to $1 billion annually in transit fees, while Russia could earn approximately $5 billion from sales via Ukraine in 2024.
• Europe's Energy Diversification
  • The European Union has offset the loss of Russian gas with liquefied natural gas (LNG) and non-Russian pipeline imports.
  • Competitors like Norway, the United States, and Qatar have gained market share at Russia's expense.

Possible Impact

• Impact on Russia and Gazprom
  • Economic Losses: Ukraine faces a loss of $800 million annually in transit fees, while Gazprom loses nearly $5 billion in gas sales.
  • Decline in Gas Exports: Russian gas transit through Ukraine fell from 65 bcm in 2020 to about 15 bcm in 2023.
  • Collapse of European Market Share: At its peak, Russia controlled 35% of Europe’s gas market, but the war has significantly eroded this dominance.
• Impact on EU
  • Countries affected
    • The Ukraine route serves Austria and Slovakia. Austria received most of its gas via Ukraine, while Slovakia takes around 3 bcm from Gazprom per year, about two-thirds of its needs.
    • Slovakia has said the loss of Russian supply would not hit its consumption and that it has diversified supply contracts.
    • Ukraine’s gas supply remains unaffected as it no longer relies on Russian transit gas.
• Market Impact
  • EU gas prices reached record highs in 2022 but are unlikely to repeat due to the small remaining volumes of Russian gas and reduced dependency.
  • The European Union has offset the loss of Russian gas with liquefied natural gas (LNG) and non-Russian pipeline imports.
  • Competitors like Norway, the United States, and Qatar have gained market share at Russia's expense.

Options available to the buyers

• Shutting Down Other Pipelines
  • Yamal-Europe Pipeline: Closed via Belarus.
  • Nord Stream Pipeline: Severely damaged in 2022.
• Alternative Routes and Adjustments
  • TurkStream Pipeline: Russia continues to export gas via TurkStream, supplying Turkey, Hungary, and Serbia.
  • European Union’s Shift: EU countries have diversified their energy sources to reduce dependency on Russian gas since 2022.
    • Slovakia: Diversifies gas supply from Hungary, Austria, the Czech Republic, and Poland.
    • Austria: Secured alternative supplies and prepared for the transition.
    • Czech Republic: Tapping into German pipelines, exempt from German gas levies, and supporting Slovakia with transit and storage capacities.
  • Moldova’s Challenges: Moldova, severely affected, plans to cut gas usage by a third.
    • Moldova receives 2 bcm of gas annually from Russia via Ukraine for Transdniestria, which generates power for the rest of Moldova.
    • Moldova has diversified its sources and will reduce gas consumption by a third starting January 1.

Q.1. Why did Russian gas transit via Ukraine stop?

The transit deal expired on January 1, 2025, without renewal due to ongoing conflict. Ukraine halted the pipeline citing national security, ending Russia’s oldest gas route to Europe.

Q.2. How is the EU mitigating the loss of Russian gas?

The EU offsets Russian gas losses through LNG imports and non-Russian pipelines. Countries like Norway, the US, and Qatar have gained market share, while Europe transitions to diversified and sustainable energy sources.

Source: IE | ET