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TOPIC : GS 2 Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Risks and rewards

What is the news?

  • The Budget’s plan to monetise public assets in order to fund fresh capital expenditure on infrastructure
  • The Government has released an exhaustive list of projects and facilities to be offered to private investors over the next four years.
  • It from the new public sector disinvestment policy is that a change of ownership is not envisaged.

Infrastructure as Stimulus in economy

  • The Government estimates these assets airports,  coal mines, highway stretches, even urban tracts, stadia and hotels to fetch around 5.96­lakh crore through structured leasing and securitization transactions.
  • It could help fund the National Infrastructure Pipeline with new projects worth 100­ lakh crore, although the Government has said fiscal constraints are not the trigger for this plan.
  • The assets or the land therein will not be sold but private players will be asked to pay for operation and management rights and expected to modernise assets that are either languishing or are simply under­utilised.

Major Infrastructure Funding

  • An infrastructure investment trust (InvIT) structure has already been used this year by the PowerGrid Corporation to raise funds against its transmission lines network and could be used for highways, gas pipelines and railway tracks, including the Dedicated Freight Corridor.
  • For ports, mining, railway stations, concession agreements laying out the contours for a PPP are propose
  • About 88,000 crore is expected from the National Monetisation Pipeline (NMP) in this year itself, in addition to the 75­lakh crore already estimated in the Budget from the sale of public firms such as Air India and BPCL.
  • While this Government is yet to complete a single PSU sale, the risks of adverse audit paras about valuations and processes hang over monetisation deals too.
  • However, post­transaction troubles in outright sales can be of a limited nature.

Way Forward

  • With proposed concession periods running up to 60 years for some assets, NMP deals, by contrast, could pose a long­term headache if they are not structured with end­user interests, balancing the profit and utility motives.
  • The sharing of risk and rewards between the public and private partners needs to be weighed carefully for each sector.
  • Checks and balances are needed for actual infrastructure usage versus projections at the time of bidding.
  • If the Government had implemented its 2014 Budget promise to set up an apex body to devise new PPP models, learning from past mistakes, India’s institutional capacity for the NMP would have been more mature by now.
  • Just like disinvestment deals during a downturn could crowd out new investments and risk the tag of ‘fire sales’
  • Revenue projections for PPP assets could be deflated now leading to lower bids followed by super­normal gains for the operator in the future.

 

Mains Question

Why the asset monetisation push needs careful calibration to evade future hazard ?

 

Sources : https://www.thehindu.com/opinion/editorial/risks-and-rewards-the-hindu-editorial-on-asset-monetisation-scheme/article36127376.ece

 

PRELIMS PUNCHERS

1.Hemavati

It is a river in Karnataka, southern India, an important tributary of the Kaveri. The Hemavati River starts in the Western Ghats near Balur in Mudigere taluk of Chikmagalur District of the state of Karnataka, in southern India. It flows through Hassan District where it is joined by its chief tributary, the Yagachi River, and then into Mandya district before joining the Kaveri near Krishnarajasagara.

A dam across the Hemavati was completed in 1979, above Gorur in Hassan district, and downstream from the Yagachi confluence. The Shettihalli Rosary Church, which was submerged during the construction of the dam can be seen only when the water level is low during the summer months. The church was constructed by French Missionaries in the 1860s, and has a mighty and magnificent structure in the Gothic Architecture. In 1960, when the government decided to build the dam, the church was abandoned. When the water level is low, sometimes coracles are used to go inside the church

Sources: https://www.thehindu.com/news/national/karnataka/three-from-mysuru-drown-in-hemavathy-canal/article36094400.ece

 

  1. ‘SUJALAM’ Campaign

The Ministry of Jal Shakti began ‘SUJALAM’, a ‘100 days campaign’ as part of the ‘Azadi Ka Amrit Mahotsav’ celebrations to create more and more ODF Plus villages by undertaking waste water management at village level particularly through creation of 1 million Soak-pits and also other Grey water management activities. The effort of campaign would be directed towards achieving the ODF plus status for villages across the country in an accelerated manner in a short time. The Campaign has started will continue to run for the next 100 days.

The campaign will not only build desired infrastructure i.e. soak pit for management of greywater in villages but will also aid in sustainable management of waterbodies. The disposal of waste water and clogging of waterbodies in the villages or on the outskirts of the villages remain one of the major problems. The Campaign would help in management of the wastewater and in turn would help to revive the waterbodies. Furthermore, the campaign would boost the momentum of SBMG phase II activities through community participation and it will increase awareness about ODF-plus activities. Hence ensuring long term maintenance and sustainability of built infrastructure.

Sources : https://pib.gov.in/PressReleasePage.aspx?PRID=1748899

 

  1. Members of Parliament Local Area Development Scheme (MPLADS)

It is a scheme formulated by Government of India to recommend developmental work in their constituencies with an emphasis on creating durable community assets based on locally felt needs.

Initially, this scheme was administered by Ministry of Rural Development. Later, in October 1994, Ministry of Statistics and Programme Implementation (MOSPI) has been looking into its working. Elected Members of Rajya Sabha representing the whole of the State as they do, may select works for implementation in one or more district(s) as they may choose. Nominated Members of the Lok Sabha and Rajya Sabha may also select works for implementation in one or more districts, anywhere in the country. MPs can also recommend work of up to Rs. 25 lakhs per year outside their constituency or state of election to promote national unity, harmony and fraternity. MPs can recommend work of up to 25 lakh for Natural Calamity in the state and up to Rs. 1 crore in the country in case of Calamity of Severe Nature (e.g. Tsunami, major cyclones and earthquakes. The District Authority should involve the MPs in the inspections of projects to the extent feasible. Sanction funds; identify implementation agency and user agency, implement the work on ground, transfer assets to user agency, and report back to ministry about status of MPLADS in the district.

Sources : https://www.thehindu.com/news/national/50-funds-allotted-for-ongoing-mplads-projects-lapse/article35731768.ece

 

  1. Bandipur National Park

It  established in 1974 as a tiger reserve under Project Tiger, is a national park located in the Indian state of Karnataka, which is the state with the second highest tiger population in India. It is one of the premiere tiger reserves in India alongside Nagarhole National Park, Mudumalai National Park and Wayanad National Park. It was once a private hunting reserve for the Maharaja of the Kingdom of Mysore but has now been upgraded to Bandipur Tiger Reserve. Bandipur is known for its wildlife and has many types of biomes, but dry deciduous forest is dominant.

Bandipur National Park is located where the Deccan Plateau meets the Western Ghats. As a result, the park has a variety of biomes including dry deciduous forests, moist deciduous forests and shrublands. The wide range of habitats help support a diverse range of organisms. The park is flanked by the Kabini river in the north and the Moyar river in the south. The Nugu river runs through the park.

Sources : https://indianexpress.com/article/cities/bangalore/nhai-seeks-diversion-of-forest-land-in-bandipur-tiger-reserve-7470076/

 

 

 

PRELIMS QUESTIONS

  1. Consider the following statement with regard to Hemavati
  2. It is an important tributary of the Krishna.
  3. Yagachi River is the principle tributary

Select the correct statement using code given below.

(a). 1only       (b) 2 only

(c).Both       (d). None of above

Answer : B

It is a river in Karnataka, southern India, an important tributary of the Kaveri. The Hemavati River starts in the Western Ghats near Balur in Mudigere taluk of Chikmagalur District of the state of Karnataka, in southern India. It flows through Hassan District where it is joined by its chief tributary, the Yagachi River, and then into Mandya district before joining the Kaveri near Krishnarajasagara.

A dam across the Hemavati was completed in 1979, above Gorur in Hassan district, and downstream from the Yagachi confluence. The Shettihalli Rosary Church, which was submerged during the construction of the dam can be seen only when the water level is low during the summer months. The church was constructed by French Missionaries in the 1860s, and has a mighty and magnificent structure in the Gothic Architecture. In 1960, when the government decided to build the dam, the church was abandoned. When the water level is low, sometimes coracles are used to go inside the church

 

  1. Consider the following statement with regard to SUJALAM’ Campaign

 

 

  1. The Ministry of Jal Shakti began ‘SUJALAM’, a ‘100 days campaign’
  2. The campaign will only build desired infrastructure i.e. soak pit for management of greywater

Select the correct statement using code given below.

(a). 1only       (b) 2 only

(c).Both       (d). None of above

Answer : A

The Ministry of Jal Shakti began ‘SUJALAM’, a ‘100 days campaign’ as part of the ‘Azadi Ka Amrit Mahotsav’ celebrations to create more and more ODF Plus villages by undertaking waste water management at village level particularly through creation of 1 million Soak-pits and also other Grey water management activities. The effort of campaign would be directed towards achieving the ODF plus status for villages across the country in an accelerated manner in a short time. The Campaign has started will continue to run for the next 100 days.

The campaign will not only build desired infrastructure i.e. soak pit for management of greywater in villages but will also aid in sustainable management of waterbodies. The disposal of waste water and clogging of waterbodies in the villages or on the outskirts of the villages remain one of the major problems. The Campaign would help in management of the wastewater and in turn would help to revive the waterbodies. Furthermore, the campaign would boost the momentum of SBMG phase II activities through community participation and it will increase awareness about ODF-plus activities. Hence ensuring long term maintenance and sustainability of built infrastructure.

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