14 May 2025 Current Affairs

Government Allocates Additional Rice for Ethanol Production: Overview and Implications

The government has decided to allocate an additional 2.8 million tonnes of rice from the Food Corporation of India (FCI) buffer stock for ethanol production under the Ethanol Blended Petrol (EBP) programme.

Objectives

• Reducing Excess Stockpiles: This move is primarily aimed at utilizing the excess rice stockpile held by the FCI, which has projected an economic cost of rice at Rs 4,173 per quintal for the 2025-26 period.
• Addressing Energy Security: By using rice for ethanol production, India aims to reduce its dependence on imported fossil fuels, promoting energy security through a renewable fuel source.
• Optimal Utilization of FCI Stocks: FCI currently holds 61 million tonnes (MT) of rice, significantly higher than the required buffer stock of 13.58 MT. This move helps in addressing the over-supply of rice.

Significance of the Allocation

1. Energy Security:

• Ethanol is a renewable, sustainable fuel that reduces India's dependence on imported fossil fuels, contributing to national energy security.

2. Economic Implications:

• Promotes 'Make in India': This initiative encourages domestic production and utilization of resources, fostering local industries and innovation.
• Farmer Income Growth: By creating a new demand for rice, the initiative also helps double farmers' incomes and generate employment in rural areas.

3. Optimal Stock Management:

• The decision to divert excess rice from FCI stocks for ethanol production aligns with government efforts to ensure that food security is not compromised while managing buffer stock inefficiencies.

Challenges Regarding Ethanol Production from Food Staples

1. Food Security vs. Energy Security:

• The use of food staples like rice, sugarcane, and corn for ethanol production raises concerns about food and livestock feed security.
• There is a growing risk of over-diverting these essential crops, which could impact food availability for the population and livestock feed systems.

2. Inflationary Pressure:

• The increased demand for food crops for ethanol production could lead to higher food prices, potentially affecting consumer affordability and food security, especially for vulnerable sections of society.

3. Sustainability Issues:

• While ethanol is a renewable biofuel, reliance on food crops for its production may lead to competition with other vital uses of these crops, such as direct food consumption or animal feed.

About Ethanol and Its Uses

1. What is Ethanol?

• Ethanol is a primary biofuel produced through the fermentation of sugars by yeasts or through petrochemical processes like ethylene hydration.

2. Uses:

• As a biofuel (blended with petrol).
• Chemical solvent in industries.
• Medical use as an antiseptic and disinfectant.

Ethanol Blended Petrol (EBP) Programme

1. Objective:

The programme aims to blend ethanol in petrol to achieve multiple objectives, including:

• Reducing import dependence on fossil fuels.
• Saving foreign exchange.
• Enhancing environmental sustainability through reduced carbon emissions.

2. Target:

• 20% ethanol blending in petrol by 2025-2026.

3. Progress:

• The blending percentage has risen from 1.53% in 2014 to 15% in 2024, showing a significant increase in the adoption of ethanol-based fuel.

India at the World Bank Land Conference 2025: Showcasing Land Management Initiatives

India took on the prestigious role of Country Champion at the World Bank Land Conference 2025, highlighting its progressive land management initiatives that are transforming rural governance and contributing to inclusive economic growth. Two flagship projects, SVAMITVA and Gram Manchitra, were prominently showcased during the conference as models of technology-driven rural development.

Key Land Management Initiatives:

1. SVAMITVA Scheme:

• Objective: SVAMITVA (Survey of Villages and Mapping with Improvised Technology in Village Areas) aims to establish clear ownership of land in rural areas through drone-based mapping.
• Achievements:

- 68,000 sq. km surveyed, with Rs. 1.16 trillion worth of land monetized.

- SVAMITVA has emerged as a scalable model for inclusive economic transformation, attracting global attention for its potential in rural development.

• Impact: Establishing clear land ownership not only improves legal rights for landowners but also enables access to formal credit, helping boost entrepreneurial activities and wealth creation.

2. Gram Manchitra Platform:

• Objective: Gram Manchitra is a geospatial planning platform that empowers Gram Panchayats (village councils) to create data-driven, localized development plans.
• Significance:

- The platform is critical for promoting climate resilience, infrastructure planning, and convergence of various governmental schemes.

- It provides a comprehensive tool for sustainable rural development by using geospatial data to make informed decisions on infrastructure and resources.

• Global Recognition: The platform has drawn significant appreciation for its adaptability and applicability in the Global South, where rural areas often face challenges related to infrastructure, climate change, and development planning.

Key Benefits of Land Management Systems:

1. Job Creation & Economic Growth:

• Streamlined access to land facilitates entrepreneurship and supports the expansion of businesses, encouraging reinvestment and creating alternative livelihoods.
• By formalizing property ownership, the system also allows landowners to leverage their assets for business opportunities.

2. Boost to Private Capital:

• Registered property rights serve as collateral, providing landowners with better access to private credit and investment. This drives private sector growth and investment in rural areas.
• With secure property rights, rural communities are more likely to access financing, thereby enabling economic growth and wealth accumulation.

3. Infrastructure and Public Services:

• Registered land systems can generate stable government revenue, which can be allocated towards funding essential public services like healthcare, education, and infrastructure development.
• The efficient management of land taxes is critical for financing long-term development plans.

4. Urban Planning and Management:

• In cities, efficient land management helps to plan for growth by identifying development opportunities, protecting public spaces, and managing disaster risks.
• It allows local governments to better manage urbanization and ensure that growth occurs sustainably.

5. Food Security:

• By improving women’s access to land, agricultural productivity can see a significant increase. Studies show that women’s access to land could boost agricultural output by 4%, contributing to food security and enhanced livelihoods.

Challenges and Opportunities:

While India’s land management initiatives like SVAMITVA and Gram Manchitra have garnered global attention for their potential to transform rural economies, challenges remain. Land titling, formal registration processes, and ensuring equitable access to land, especially for marginalized communities, are areas that require continued focus. Moreover, scaling these initiatives to cover all of India’s rural areas will require collaboration between local governments, technology providers, and stakeholders.

US President Signs Executive Order for Most-Favoured Nation (MFN) Prescription Drug Pricing

In a move aimed at reducing the cost of prescription drugs in the U.S., President Donald Trump signed an executive order that seeks to implement Most-Favoured Nation (MFN) pricing for pharmaceutical products. This policy change has significant potential implications, particularly for India's pharmaceutical sector, which plays a major role in supplying affordable generic drugs to the U.S. market.

What is Most-Favoured Nation (MFN) Pricing?

The Most-Favoured Nation (MFN) principle is a key element in the multilateral trading system and is enshrined in the General Agreement on Tariffs and Trade (GATT) of 1994 under the World Trade Organization (WTO). The principle ensures that:

• The best access conditions given to one country in a trade agreement must automatically be extended to all other countries in the system.
• It promotes a non-discriminatory environment where trading partners cannot discriminate based on economic or political clout.

In the context of the executive order, MFN pricing would require the U.S. to purchase prescription drugs at the lowest price available in other high-income countries, rather than paying more for the same drugs.

Current U.S. Pharmaceutical Pricing and the Need for Reform

• Price Disparity: The U.S. is currently paying approximately three times more for prescription drugs than other high-income countries, leading to public outcry and calls for reform.
• The executive order aims to address this disparity and make prescription drugs more affordable for U.S. citizens, potentially resulting in significant cost savings for both the U.S. government and patients.

Potential Impact on India’s Pharmaceutical Sector

India's pharmaceutical sector is one of the largest suppliers of generic drugs to the global market, with the U.S. being a key trading partner. The executive order could have several ramifications for India's pharmaceutical industry:

1. Export Concerns:

• The U.S. accounts for nearly one-third of India's pharmaceutical exports, amounting to approximately $10 billion annually.
• If the U.S. enforces MFN pricing, it could reduce the prices Indian pharmaceutical companies receive for their products, impacting their export revenue and profitability.
• A decrease in profits from the U.S. market could put pressure on Indian pharmaceutical companies to find alternative markets or offset the losses by increasing prices in other countries, potentially hurting their competitiveness.

2. Impact on Research and Development (R&D):

• Pharmaceutical companies rely on the profits from high-price markets like the U.S. to fund research and development for new drugs.
• If the executive order leads to lower drug prices in the U.S., it could reduce profits, thereby limiting the resources available for innovation and the development of new medicines. This could potentially slow the pace of pharmaceutical advancements, particularly in the field of life-saving drugs.

3. Increased Prices in Domestic Market:

• In response to reduced profits from the U.S. market, Indian pharmaceutical companies may attempt to recover their losses by raising prices in domestic markets like India.
• This could put pressure on Indian consumers and strain the affordability of medicines within the country, particularly for essential generic drugs.

Long-term Implications for Global Pharmaceutical Trade

The implementation of MFN pricing could have broader implications for the global pharmaceutical trade system:

• Price Setting Dynamics: The U.S. is a dominant player in the global pharmaceutical market, and any change in its pricing mechanisms could influence how prices are set globally.
• Pressure on Other Countries: Other countries may follow the U.S. lead, pressuring pharmaceutical companies worldwide to lower prices, particularly in high-income markets. This could lead to tighter profit margins for Indian pharmaceutical exporters and other developing countries that rely on the export of affordable medicines.

Indian Armed Forces Intercept and Neutralize Foreign Weapons

The Indian Armed Forces recently intercepted and neutralized a range of advanced foreign weaponry allegedly sent from Pakistan, including PL-15 missiles and Byker YIHA III Kamikaze drones. These interceptions reflect the increasing sophistication of modern military technologies and the growing threats from unconventional warfare.

PL-15 Air-to-Air Missile

The PL-15 is a Chinese-origin air-to-air missile, and it is among the most advanced missiles in Pakistan's arsenal. Key details about the PL-15 include:

• Guidance System: The missile employs active radar guidance coupled with satellite and inertial navigation systems, making it highly accurate and difficult to evade.
• Range and Speed: It has a long-range, which allows it to be effective in engaging enemy aircraft at substantial distances, offering a significant advantage in air-to-air combat.
• Stealth and Precision: The combination of active radar and inertial navigation allows the PL-15 to effectively target and strike at high-speed, maneuvering aircraft, reducing the chances of interception by enemy air defense systems.

The interception of these missiles by the Indian Armed Forces highlights their readiness and capability to defend against such sophisticated threats, maintaining air superiority.

Byker YIHA III Kamikaze Drones

The Byker YIHA III is a Turkish-made kamikaze-style loitering drone designed for single-use missions. These drones have gained attention for their effectiveness in precision strikes against high-value targets. Here are the critical features of the Byker YIHA III:

• Loitering and Kamikaze Capability: The drone is designed to loiter over a target area for an extended period before making a precise, controlled strike, making it extremely effective for targeting stationary or moving objects. As a kamikaze-style drone, it self-destructs on impact, ensuring complete destruction of the target.
• Payload: The Byker YIHA III can carry high-explosive warheads, enhancing its destructive power. It is designed to strike hard and fast, typically used against critical infrastructure, command centers, or enemy military assets.
• Precision: These drones are highly accurate and can be guided to targets using real-time data, making them a strategic weapon in modern warfare.

The deployment of such drones represents a growing trend in asymmetrical warfare, where low-cost, high-tech weaponry is used to bypass traditional defense systems.

National Defence Fund (NDF)

The recent donations to the NDF, including by the Telangana Chief Minister and others, reflect continued support for the armed forces. This gesture of solidarity is an important aspect of strengthening national defense and ensuring that the needs of those who serve in the armed forces are met.

National Defence Fund (NDF)

The National Defence Fund (NDF) was established in 1962 to support the welfare of the Armed Forces and their families. The fund was created in response to the increased demands for resources and support for national defense following the war with China in 1962.

1. Key Objectives of NDF

• Collection of Donations: The NDF is responsible for voluntary donations made by individuals, organizations, and corporations in both cash and kind to promote the national defense effort.
• Utilization of Funds: The donations received are primarily utilized for the welfare of Armed Forces members, including Para Military Forces and their families. The funds also support their education, medical care, rehabilitation, and general welfare.

2. Administration of NDF

Executive Committee: The National Defence Fund is administered by an Executive Committee, which is headed by the Prime Minister of India. Other key members of the committee include:

• Defence Minister
• Finance Minister
• Home Minister

The Finance Minister also serves as the Treasurer of the fund, overseeing the management and allocation of the resources.

3. Tax Benefits for Donors

• Income Tax Exemption: Donations made to the National Defence Fund are eligible for exemption from income tax under Section 80(G) of the Income Tax Act. This provides a strong incentive for individuals and organizations to contribute towards the welfare of the Armed Forces.