CAO Daily Editorial analysis for UPSC IAS 05-October, 2017

Current Affairs Only Daily Editorial Analysis for Competitive Exams


5th October, 2107

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The telecom battle lines (The Hindu)


Why is it in the news?

Recently, TRAI came out with ‘Telecommunication Interconnection Usage Charges (Thirteenth Amendment) Regulations’ wherein it directed slashing mobile termination charges by 57% from 14 paise to 6 paise per minute from October 1, and completely doing away with these charges from January 1, 2020

What has TRAI reasoned?

 The reduction in MTC is likely to yield consumer benefits.

These charges work as a disincentive for deployment of new technologies such as VoLTE, or Voice over Long-Term Evolution, and migration to Internet Protocol networks by operators, wherein there are no interconnection charges.

What is the controversy?

The decision follows a prolonged battle between the Mukesh Ambani-led Reliance Jio and the top three telcos, Airtel, Vodafone and Idea.

While the top operators had pitched for doubling the mobile termination charges to over 30 paise “to recover their cost,” the newer rival had suggested zero charges and shifting to the bill-and-keep regime, under which operators bill their own subscribers for outgoing calls and keep the revenue received.

InterconnectionImage result for interconnection in telecommunications

  • Interconnection allows subscribers, services and networks of one service provider to be accessed by subscribers, services and networks of the other service providers.
  •  If networks are efficiently interconnected, subscribers of one network are able to seamlessly communicate with those of another network or access the services offered by other networks.

Interconnection usage charges (IUC)

Interconnection Usage Charges (IUC) are wholesale charges payable by a Telecom Service Provider (TSP) to another telecom service provider (TSP), for terminating or transiting/carrying a call from its network to the network of the receiving TSP. The IUC mainly consists of termination charges, origination charges and carriage/transit charges.

The Telecom Regulatory Authority of India (TRAI) terms interconnection as the “lifeline of telecommunications” as it allows subscribers of one network to seamlessly communicate with those of another network or access the services offered by other networks.


Coal-fired projections (The Hindu)


 Context

This article deals with the points which were not considered while framing energy policy

Why in news?

The draft energy policy fails to consider several critical issues involved in the ongoing energy transition

NITI ayog’s prediction

  • The NITI Aayog’s Draft National Energy Policy (DNEP) predicts that between now and 2040, there will be a quantum leap in the uptake of renewable energy together with a drastic reduction in fossil fuel energy intensity.
  • India’s annual per-capita electricity consumption is expected to triple, from 1075 kWh in 2015-16 to over 2900 kWh in 2040.
  • The DNEP assumes 100% electrification throughout India in the near term .

 Critical issues, DNEP fails to consider

Based on coal

  • DNEP relies on coal power to sustain the nation’s base load requirement to meet rising energy demand. It proposes that coal will fuel 67% of India’s power generation in 2022.
  • The first anomaly is that while India claims it will make a big push for renewables, it will continue to rely on coal for its baseload generation.
  •  While renewables grow, coal power grows too. This duality is possible because India did not commit to any actual reductions in its greenhouse gas emissions at the Paris climate meeting in 2015.
  • India will need only 741 million tonnes of coal in 2022 and 876 million tonnes in 2027. But the Ministry of Coal continues to push its ambitious targets to raise coal production to 1.5 billion tonnes by 2020, what will be done to extra coal produced

An electric future

  • The DNEP fails to highlight the gradual substitution of internal combustion engines with electric vehicles.
  • This transformation in the automobile sector could be accompanied by grid- and consumer-level electricity storage at homes, offices and factories.
  • The DNEP acknowledges that India’s oil consumption has grown 63% from 2005 to 2016 .
  • India’s oil import dependence may reach 55% from the current level of 33%.
  • The drafting committees need to examine the paradigm shifts occurring in storage and electric vehicles to promote new technologies in renewable energy.

The next rate cut is uncertain (Livemint)


Context

RBI will continue to watch the inflation trajectory for months before taking a call on the next rate cut, which can only happen if economic growth drops much below its annual projection

In news

The Reserve Bank of India (RBI) has kept its policy rate unchanged at 6% and the stance of the October monetary policy continues to remain neutral.

Why?

INFLATION
The RBI today said that retail inflation measured by year-on-year change in the consumer price index or CPI edged up in July and August to reach a five month high. “The MPC observed that CPI inflation has risen by around two percentage points since its last meeting,” the central bank noted.

GVA GROWTH
The RBI in its assessment said that India’s real gross value added or GVA growth slowed significantly in the first quarter of 2017-18, cushioned  partly by the extensive front-loading of expenditure by the government.

Current Account Deficit
The monetary policy committee in its report said that the sharper increase in India’s imports relative to exports resulted in a widening of the current account deficit in the first quarter of 2017-18. Net foreign direct investment at USD 10.6 billion in April-July 2017 was 24 per cent higher than during the same period of last year.

Export and Service 
The RBI assessment revealed that while merchandise export growth picked up in August 2017, India’s export growth continued to be lower than that  of  other emerging economies such as Brazil, Indonesia etc.

GST
The monetary policy committee said that the implementation of the GST so far appears to have had an adverse impact, rendering prospects for the manufacturing sector uncertain in the short term. “This may further delay the revival of investment activity, which is already hampered by stressed balance sheets of banks and corporates,”

RBI forecast

RBI lowered the economic growth forecast for the fiscal year to 6.7% from 7.3% earlier, arguing that the June quarter slump to a three-year low may be transient, and raised inflation forecasts citing pressures from possible fiscal slippages, state government staff salary increases and spike in oil and food prices

Possible solutions

Measures need to be undertaken to support growth and achieve a faster closure of the output gap, including restarting stalled investment projects, including in the public sector, enhancing ease of doing business,

The MPC held firm on interest rates amid concerns over prices — it’s mandated to keep inflation at 4% with a margin of two percentage points on either side.


 

 

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