Current Affairs – August 29, 2024

{GS2 – Governance – Laws} Section 45 of PMLA

Context (TH): The Supreme Court held that bail is the rule and jail an exception even in money laundering cases.

The court held that Section 45 (conditions for bail) of the Prevention of Money Laundering Act (PMLA) should not be construed by the prosecution in such a way to make bail an impossibility in money laundering cases.
Section 45 states that an accused person shall not be granted bail unless:
1. The Public Prosecutor has been given an opportunity to oppose the application for such release;
2. if the public prosecutor opposes the application, the court can grant bail if it is satisfied that the twin conditions of bail are fulfilled:
  1. There are reasonable grounds for believing that he is not guilty of such offence and
  2. He would not commit any crime while out on bail.
The court said bail is must if the twin conditions of Section 45 were satisfied.
The judgement also stated that liberty of the individual is always a rule; deprivation an exception.

{GS2 – IR – India-Brazil} India-Brazil Strategic Partnership

Context (TH): The India-Brazil strategic partnership established in 2006 has “deepened and diversified” over the years and now spans a very wide range of domains

Areas of Cooperation

Political Cooperation: Strategic Partnership by deepening their cooperation in BRICS, IBSA, G4 & G20.
- Global South Leadership: They lead South-South cooperation and advocate for large developing countries to shape global rules.
Bilateral Trade: India is Brazil’s 5th largest trading partner (USD 11 billion). The key exports include agrochemicals and auto components from India and crude oil and sugar from Brazil.
Investment: Indian investments in Brazil are significant, with USD 6 billion estimations. Sectors include automobiles, IT, and biofuels.
Defence and Security ties include joint defence committees and cooperation agreements. Notable developments include the joint venture for small arms production and collaborative naval activities.
Space Cooperation: Both countries collaborate on satellite tracking and space exploration, with Brazil’s Amazonia-1 satellite being a recent highlight.
Technology Initiatives: The bilateral science and technology cooperation includes agreements on research and development, especially in areas like agriculture and food processing.
Biofuels and Oil: Cooperation in biofuels and oil, with Brazil’s significant oil reserves and India’s interest in renewable energy, including recent joint working groups on energy.
Cultural Exchanges: There is considerable interest in Indian culture in Brazil, supported by cultural exchange programs and the strong presence of Yoga and Ayurveda practices.

Challenges Faced

Trade Competition: India and Brazil face competition in agricultural exports, such as sugar and meat.
Sugarcane Subsidy Disputes: Brazil’s complaint to the WTO regarding India’s subsidies to sugarcane farmers has caused tension between the two countries.
Impact of China’s Influence: China’s growing influence in Brazil’s trade and economic landscape affects the India-Brazil relationship, potentially overshadowing India’s partnership with Brazil.
Differences in Strategic Priorities: Divergent approaches to regional and global issues can create friction between the two countries, affecting their joint efforts on global platforms.
Geographical and Connectivity Barriers: The lack of direct air connectivity and geographic distance between India and Brazil creates logistical challenges for deepening bilateral cooperation.

Way Forward

Strengthen Bilateral Relations: Increase high-level visits and joint statements to foster a cooperative environment and address disputes collaboratively.
Enhance Trade Agreements: Negotiate and implement comprehensive trade agreements to address issues such as trade imbalances and market access.
Promote People-to-People Exchanges: Launch cultural exchange programs, educational partnerships, and tourism initiatives to build mutual understanding and goodwill.
Develop Diversified Economic Partnerships: Explore and establish economic partnerships with other countries to reduce reliance on any single nation and mitigate geopolitical risks.
Align Strategic Priorities: Engage in regular diplomatic dialogues and collaborate in multilateral forums to align strategic interests and address regional security concerns.
Improve Connectivity: Invest in infrastructure projects that enhance regional connectivity, such as improved transportation links and communication networks.

G4 nations: A group of four countries, Brazil, Germany, India, and Japan, that support each other’s bids for permanent seats on the United Nations Security Council.

{GS2 – MoF – Schemes} MUDRA 2.0 Program **

Context (IE): The article is advocating for the MUDRA 2.0 program, emphasizing the recent enhancement in loan limits and suggesting the need for an updated version of the scheme.

Launched in 2015, the Pradhan Mantri MUDRA Yojana (PMMY) aimed to ignite entrepreneurship by offering collateral-free micro-loans up to ₹10 lakh.
The Union Budget 2024 has increased the loan limit to ₹20 lakh benefiting previous MUDRA loan recipients under the Tarun category.
The MUDRA Scheme disbursed over Rs 27.75 lakh crore to 47 crore small and new entrepreneurs, impacting the grassroots economy.
The scheme promotes gender equality and social equity, supporting rural and semi-urban job creation and self-employment.
It has an inclusive approach (69% of loans are held by women; 51% by SC/ST and OBC entrepreneurs).
Non-performing assets (NPAs) under the scheme have decreased from 3.61% in FY21 to 2.1% in FY24.

MUDRA Products

Shishu: Loans up to Rs. 50,000.
Kishore: Loans from Rs. 50,000 to Rs. 5 lakh.
Tarun: Loans from Rs. 5 lakh to Rs. 10 lakh.

Challenges Faced by PMMY

Targeting Difficulties: Ensuring benefits reach the smallest and most marginalized entrepreneurs, especially in rural and remote areas, has been challenging.
Skewed Loan Distribution: Disparities in fund allocation, with top districts receiving more than Rs 26,000 crore in 2021-22 compared to the bottom 318 districts.
High NPAs in Certain Categories: Kishore and Shishu categories face higher NPAs due to a lack of business skills among early-stage entrepreneurs.
Many beneficiaries are financially illiterate (73%) especially first-time borrowers, leading to defaults and financial mismanagement.
Inadequate monitoring and implementation have resulted in leakages and misuse of funds.
Maintaining quality credit appraisal amidst increased lending pressures is challenging, with exposure growing from Rs 3.3 lakh crore in FY22 to over Rs 5 lakh crore by FY24.
The absence of a robust credit guarantee mechanism has made banks hesitant to lend, particularly to small enterprises, limiting their growth opportunities.

Recommendations for MUDRA 2.0

Focused Outreach: Establish empowerment zones in rural and semi-urban areas to provide comprehensive services, including financial literacy, mentorship, and business support.
Enhanced Financial Literacy: Implement nationwide financial literacy programs covering budgeting, savings, credit management, investment strategies, and digital literacy to empower entrepreneurs.
Enhanced Credit Guarantee Scheme (ECGS): Introduce an ECGS to provide credit guarantees and reduce risks for financial institutions, encouraging more lending to small and micro enterprises.
Real-time robust monitoring and evaluation framework system: To be developed to track loan disbursements, utilization, and repayments.
Beneficiary impact assessments: To measure socio-economic outcomes and improve transparency and efficiency.
Credit appraisal processes: To ensure quality lending & manage increased lending pressures.
Targeted support for high-risk categories, such as Kishore and Shishu loans, to address higher NPAs and improve financial management among early-stage entrepreneurs.

{GS3 – Agri – Crops} Dhaincha

Context (TH): Dried Dhaincha stems are used by villagers living in low-lying areas of Assam to use them as kindling during floods.

It is native to Asia and North Africa, is most common in tropical Africa where it grows as a common noxious weed, and has been introduced to the Americas.
It can grow on saline soil and is adapted to wet, heavy soil but apparently adapts easily to drought-prone or sandy regions.
It can be grown on all season having sufficient moisture in soil.
It is cultivated widely in India and grown in rice paddies for using it as firewood. The foliage makes a good fodder for livestock.
It is generally used as green manure crop. It not only improve physical properties but is also a leguminous plant and thus helps in meeting nitrogen requirement of succeeding crop.

Green Manuring

Green Manuring is growing of field plants belonging to leguminous family and incorporating them into the soil after sufficient growth. It encourages sustainable agriculture and organic farming.
Objectives: It improve soil structure, increase water holding capacity and decrease soil loss by erosion, reduce weed proliferation and weed growth, reclamation of alkaline soils, add organic matter to the soil.
It simulates activity of soil micro-organisms and take nutrients from lower layers of the soil and add it to the upper layer in which it is incorporated.

{GS3 – Envi – Conservation} Ethanol Production Capacity **

Context (TH): India plans to increase ethanol blending to 20% by 2025-26 (current rate 13-15%).

With this, India aims to reduce greenhouse gas emissions, save $4 billion annually in foreign exchange, and boost rural economies through crop cultivation.
20% blending requires producing 1,000 crore litres of ethanol, and an additional 310 crore litres is needed for consumable liquor and industrial uses.
Current ethanol production capacity is 1,380 crore litres (875 crore litres from sugarcane, 505 crore litres from food grains), nearly achieving the target with a higher sugarcane component.

Policy Measures

NITI Aayog’s roadmap aims to increase sugarcane-based distilleries from 426 crore litres in 2021 to 760 by 2026, and grain-based distilleries from 258 to 740 crore litres.
In 2022-23, 63% of fuel ethanol came from B-heavy molasses. With a surplus of sugarcane (340 lakh tonnes produced and 285 lakh tonnes consumed in 2023-24), restrictions on its use for ethanol production are expected to be lifted.
The government policy supports using maize, surplus rice, and damaged grains for ethanol production.

B-heavy molasses (used for sugar production) were permitted to be used by the government for ethanol production to boost output, but its high sugar content influences ethanol pricing.

Concerns

Water Use: Expanding sugarcane production for ethanol will require an additional 400 billion litres of water, potentially reducing irrigation for food crops.
Grain-Based Distilleries: With restrictions on molasses, grain-based distilleries are operating at full capacity, which is affecting the availability of maize for other uses, especially poultry feed (47%).
Maize Imports: Maize imports, valued at $103 million from April to June 2024, have increased compared to $39 million for the whole of 2023-24.
Maize Cultivation: Meeting the blending target requires an additional 4.8 million hectares of maize cultivation, almost doubling current levels.

India is one of the major maize producers globally, but domestic consumption consistently outpaces production and India’s maize yield is much lower than other countries.

Fuel Efficiency: Ethanol reduces fuel efficiency by 6% in non-compatible vehicles.

ENA Pricing: Fuel ethanol pricing is uniform across India, but States set the pricing for Extra Neutral Alcohol (ENA) (used in liquor production and other applications) creating variations in prices.

Source: The Hindu

State Perspectives on Ethanol Policy

Uttar Pradesh: Aligns with the ethanol mission and is a major contributor to the ethanol blending program, reserving 25% of ethanol for ENA and distilleries processing both sugarcane and grain.
Tamil Nadu: Ethanol use is limited due to the state’s reliance on liquor revenue (1/6^th of total revenue), restricted sugarcane cultivation due to water needs, and potential political backlash from supplying broken rice for ethanol.
Maharashtra: Focuses on producing ENA for various uses like fashion and medicine due to higher profitability compared to fuel ethanol.

Way Forward for Ethanol Blending in India

Leverage Regional Strengths:
- Promote maize-based distilleries to address sugarcane dependence and water issues in Tamil Nadu.
- Offer stable contracts for fuel ethanol to boost attractiveness over ENA in Maharashtra.
Refine Pricing & Policy:
- Standardize ethanol pricing nationwide for fair competition and higher production.
- Extend interest subventions and raise ethanol prices to encourage investment and growth.
Encourage Technological and Policy Innovation:
- Invest in advanced ethanol technologies to minimize food resource impact.
- Build infrastructure to support increased production and blending, including logistics and storage.

To know more > Ethanol Blending, Ethanol Blended Petrol (EBP) Programme

{GS3 – IE – Industry} Industrial Parks

Context (TH): The Cabinet Committee on Economic Affairs cleared an outlay of ₹28,602 crore to set up 12 Industrial Parks across 10 States and along six major Industrial Corridors.

The Greenfield industrial “smart cities” can attract potential investments, provide millions of direct and indirect jobs, and will offer investors a ‘plug and play’ alternative to set up shops.

Greenfield Investment	Brownfield Investments
A new venture is began by constructing new facilities instead of buying an existing facility. Advantage: It offers design flexibility along with the efficiency to meet the project’s needs.	It occur when an entity purchases or leases an existing facility to begin new production. Advantage: It reduces start-up costs, time for the construction of new infrastructure.

{Prelims – S&T – Defence} SIG 716 rifles

Context (TH): The Ministry of Defence signs a repeat order for 73,000 SIG 716 rifles.

The SIG716 is an assault rifle manufactured by SIG Sauer which has an effective range of 600 m and is more capable and reliable than the INSAS in use.
Its robust design and capability make it ideal for long-range engagements. It also has the capability to penetrate tougher targets.
Its gas piston system enhances reliability and reduces maintenance needs, a significant advantage in hostile environments or during extended operations.
Additionally, the modularity of the SIG 716 allows for easy adaptation to various roles making it extremely versatile for armed forces and specialized tactical units.
It is used as a DMR (Designated Marksman Rifle), a medium-range precision rifle, or as an individual long-range weapon useful in mountain combat or areas with vast open spaces.

Indian Small Arms System (INSAS)

It is a family of infantry arms consisting of an assault rifle and a light machine gun (LMG) whose development began in the mid-1980s.
These weapons were developed indigenously by the Armament Research and Development Establishment and manufactured by the Ordnance Factories Board at its various factories.
It was the standard infantry weapon of the Indian Armed Forces for almost three decades.