Daily Current Affairs for UPSC CSE
- Wholesale Price Inflation
- Talaq -e – hasan
- Ethanol Blending
- Facts for Prelims
1 . Wholesale Price Inflation
Context: WPI-based inflation eases below 14% for the first time since February; diesel inflation zooms to 72.4%
- Wholesale price inflation moderated to 13.93% in July from 15.18% in June. It was driven by a low-price gain in primary products, food items and manufactured products, even though fuel and power inflation resurged.
- This is the 16th month in a row that wholesale inflation is above 10%, but at the same time it marked the first dip below 14%-plus levels since February.
- The Wholesale Price Index (WPI) dropped only 0.13% on a month-on-month basis between June and July, as fuel and power inflation jumped 6.56% sequentially, offsetting the moderation in other categories.
- Inflation in July 2022 is primarily contributed by rise in prices of mineral oils, food articles, crude petroleum & natural gas, basic metals, electricity, chemicals & chemical products, food products etc.
- There is probability of first single-digit WPI inflation print by October 2022, if the downtrend in commodity prices sustains.
About Wholesale Price Index (WPI)?
- A wholesale price index (WPI) is an index that measures and tracks the changes in the price of goods in the stages before the retail level. This refers to goods that are sold in bulk and traded between entities or businesses (instead of between consumers).
- Usually expressed as a ratio or percentage, the WPI shows the included goods’ average price change; it is often seen as one indicator of a country’s level of inflation.
- In India WPI is also known as the headline inflation rate .
Who publishes WPI in India and what does it show?
- The WPI is published by the Economic Adviser in the Ministry of Commerce and Industry.
- Analysts use the numbers to track the supply and demand dynamics in industry, manufacturing and construction.
- In India, Office of Economic Advisor (OEA), Department of Industrial Policy and Promotion, Ministry of Commerce and Industry calculates the WPI.
- An upward surge in the WPI indicates inflationary pressure in the economy and vice versa.
- The quantum of rise in the WPI month after-month is used to measure the level of wholesale inflation in the economy.
What is the difference between WPI and CPI inflation?
- While WPI keeps track of the wholesale price of goods, the CPI measures the average price that households pay for a basket of different goods and services.
- Even as the WPI is used as a key measure of inflation in some economies, the RBI no longer uses it for policy purposes, including setting repo rates.
- The central bank currently uses CPI or retail inflation as a key measure of inflation to set the monetary and credit policy.
Base year of calculation
- With an aim to align the index with the base year of other important economic indicators
- such as GDP and IIP, the base year was updated to 2011-12 from 2004-05 for the new series of Wholesale Price Index (WPI), effective from April 2017.
Calculation of Wholesale Price Index?
- The monthly WPI number shows the average price changes of goods usually expressed in ratios or percentages.
- The index is based on the wholesale prices of a few relevant commodities available.
- The commodities are chosen based on their significance in the region. These represent different strata of the economy and are expected to provide a comprehensive WPI value.
- The advanced base year 2011-12 adopted recently uses 697 items.
Major components of WPI
- The index basket of the WPI covers commodities falling under the three major groups namely Primary Articles, Fuel and Power and Manufactured products
- The prices tracked are ex- factory price for manufactured products, mandi price for agricultural commodities and ex-mines prices for minerals.
- Weights given to each commodity covered in the WPI basket is based on the value of production adjusted for net imports.
- Primary articles is a major component of WPI, further subdivided into Food Articles and Non-Food Articles.
- Food Articles include items such as Cereals, Paddy, Wheat, Pulses, Vegetables, Fruits, Milk, Eggs, Meat & Fish, etc.
- Non-Food Articles include Oil Seeds, Minerals and Crude Petroleum
- The next major basket in WPI is Fuel & Power, which tracks price movements in Petrol, Diesel and LPG
- The biggest basket is Manufactured Goods. It spans across a variety of manufactured products such as Textiles, Apparels, Paper, Chemicals, Plastic, Cement, Metals, and more.
- Manufactured Goods basket also includes manufactured food products such as Sugar, Tobacco Products, Vegetable and Animal Oils, and Fats.
- WPI has a sub-index called WPI Food Index, which is a combination of the Food Articles from the Primary Articles basket, and the food products from the Manufactured Products basket.
- WPI basket does not cover services
Main uses of WPI
- To provide estimates of inflation at the wholesale transaction level for the economy as a whole. This helps in timely intervention by the Government to check inflation in particular, in essential commodities, before the price increase spill over to retail prices.
- WPI is used as deflator for many sectors of the economy including for estimating GDP by Central Statistical Organisation (CSO).
- WPI is also used for indexation by users in business contracts.
- Global investors also track WPI as one of the key macro indicators for their investment decisions
WPI Based Inflation
- Inflation is the rate of increase in prices over a given period of time.
- Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.
- There are certain limitations in using WPI as a measure for inflation, as WPI does not consider the price of services, and it does not reflect the consumer price situation in the country.
- WPI provides estimates of inflation at the wholesale transaction level for the economy overall.
- It also helps in timely intervention by the government to monitor inflation before the price hike spills over to retail prices.
- The WPI-based inflation is used by the government in preparation of fiscal, trade, and other economic policies.
- Business organisations, policymakers, accountants, and statisticians use WPI as an indexing tool to formulate price adjustment clauses.
- Rise in WPI indicates inflationary pressure in the economy, and vice versa.
- The extent of rise in WPI is used to measure the level of wholesale inflation in the economy.
2 . Talaq-e hasan
Context: Recently the Supreme Court observed that the Muslim personal law practice of talaq-e-Hasan is “not so improper”.
About the Petition
- The top court was hearing a plea seeking to declare Talaq-e-Hasan’ and all other forms of “unilateral extra-judicial talaq as void and unconditional”, claiming they were “arbitrary, irrational, and violated fundamental rights”.
- The petitioner submitted that her husband had allegedly divorced her by sending a Talaq-e-Hasan notice through a lawyer after her family refused to pay dowry, even as her in-laws were harassing her for the same.
- According to the Petition talaq-e-hasan and “other forms of unilateral extra judicial talaq is an evil plague similar to sati”. “Talaq-e-hasan is arbitrary, irrational and contrary to Articles 14, 15, 21 and 25 and international conventions on civil rights and human rights,” the petition submitted. There should be a “gender neutral, religion neutral, uniform grounds of divorce and uniform procedure of divorce for all citizens”, it read.
- The petitioner argued that the practice in question was “neither harmonious with the modern principles of human rights and gender equality nor an integral part of Islamic faith”.
- She has also sought direction from the Centre to frame guidelines for neutral and uniform grounds of divorce and procedure for all citizens.
- The apex court, while striking down triple talaq in the Shayara Bano case, did not address the issue of talaq-e-Hasan.
Key Highlight of the Verdict
- The court said the issue under question was not instantaneous triple talaq or talaq-e-biddat. It repeated that the petitioner could opt for divorce through the khula procedure.
- According to the verdict Muslim woman has the option to divorce by the process of khula by returning the dower (mahr) or something else that she received from her husband or without returning anything, as agreed by the spouses or Qadi’s (court) decree depending on the circumstances.
- It also told the petitioner that dissolution of marriage is also possible without the intervention of court through ‘mubarat’ and asked her counsel to seek instructions.
- Court has granted couples who cannot live with each other divorce on the ground of irretrievable breakdown of the marriage. It asked whether the petitioner was willing to explore this option if the issue of mahr was taken care of.
Difference between Talaq-e-Hasan and Triple Talaq
- In Islam, there are essentially three forms of divorce:
- Talaq-e-Hasan and
What is Talaq-e-Hasan?
- In Talaq-e-Hasan, talaq is pronounced once a month, over a period of three months and if cohabitation does not resume during this period, the divorce gets formalised after the third utterance in the third month.
- However, if cohabitation resumes after the first or second utterance of talaq, the parties are assumed to have reconciled. The first and second utterances of talaq are then deemed invalid.
- The form of divorce has been subject to criticism over the years. Various petitioners have approached the court to seek its abolishment, saying that “it violates women’s rights”.
- Talaq-e-Ahsan is the least disapproved way of dissolving a marriage. ‘Ahsan’ means best or most proper. Under Talaq-e-Ahsan, the husband must pronounce divorce in a single sentence when the wife is in a state of ‘purity’, that is, not menstruating.
- The divorce is followed by a period of abstinence, known as “iddat”. The duration is ninety days or three menstrual cycles or three lunar months.
- If the couple resumes cohabitation or intimacy within the period of iddat, the pronouncement of divorce is treated as having been revoked. Thus, ‘talaq-e-ahsan’ is revocable.
- On the other hand, if there is no resumption of cohabitation or intimacy during this period, divorce becomes final and irrevocable.
- Talaq-e-biddat is the most controversial form of divorce and was banned by the government in 2019. This can take the form of triple talaq (instant divorce), wherein the husband can pronounce “talaq” thrice in one sitting to divorce his wife.
- Divorce is thus instant and becomes irrevocable immediately when it is pronounced.
- Talaq-e-biddat does not observe the waiting period and irrevocably terminates the marriage.
- This form of divorce, though considered valid under Sharia law, is generally disapproved in Islam.
3 . Ethanol Blending
Context: Indian Prime Minister announced that India has achieved its target of blending 10% sugarcane-extracted ethanol in petrol, ahead of schedule. While addressing the nation on the 76th Independence Day, he rooted for energy independence. India is one of the world’s biggest oil importing nations.
What is Ethanol blending
- Blending ethanol with petrol to burn less fossil fuel while running vehicles is called ethanol blending.
- Ethanol is an agricultural by-product which is mainly obtained from the processing of sugar from sugarcane, but also from other sources such as rice husk or maize.
- Currently, 10% of the petrol that powers vehicles is ethanol. Though we have had an E10 — or 10% ethanol as policy for a while, it is only this year that we have achieved that proportion.
- India’s aim is to increase this ratio to 20% originally by 2030 but in 2021, when NITI Aayog put out the ethanol roadmap, that deadline was advanced to 2025.
- It will help bring down the share of oil imports (almost 85%) on which we spend a considerable amount of our precious foreign exchange.
- More ethanol output would help increase farmers’ incomes.
First generation and second generation ethanols
- To augment ethanol supplies, the government has allowed the procurement of ethanol produced from other sources besides molasses — which is first-generation ethanol or 1G.
- Second-generation ethanol sources or 2G: Ethanol extracted from materials such as rice straw, wheat straw, corn cobs, corn stover, bagasse, bamboo and woody biomass. It provides the prospect of higher income for farmers as they can sell the residual stubble to help make biofuels. This means less stubble burning and therefore, lesser air pollution.
How have other countries fared?
- U.S., China, Canada and Brazil all have ethanol blending programmes, but Brazil stands out.
- It had legislated that the ethanol content in petrol should be in the 18-27.5% range, and it finally touched the 27% target in 2021.
Impact on the auto industry
- Petrol points, plastics, rubber, steel and other components in vehicles would need to be compliant to hold/store fuel that is 20% ethanol.
- Without such a change, rusting is an obvious impediment.
- Auto- industry has committed to becoming E20 engine compliant by 2025, which means that engines would need to be tweaked so as to process petrol which has been blended with 20% ethanol.
Challenges before the industry when it comes to 20% ethanol blended fuel
- Optimisation of engine for higher ethanol blends
- Conduct durability studies on engines and field trials before introducing E20-compliant vehicles.
- Storage is going to be the main concern, for if E10 supply has to continue in tandem with E20 supply, storage would have to be separate which then raises costs.
Objections against this transition
- Ethanol burns completely emitting nil carbon dioxide. By using the left-over residue from rice harvests to make ethanol, stubble burning will also reduce. The 2G ethanol project inaugurated last week will reduce greenhouse gases equivalent to about three lakh tonnes of CO2 emissions per annum, which is the same as replacing almost 63,000 cars annually on our roads. However, it does not reduce the emission of another key pollutant — nitrous oxide.
- Inefficient land use in ethanol production – We can use land far more efficiently by generating renewable power for EV batteries. For example, to match the annual travel distance of EVs recharged from one hectare generating solar energy, 187 hectares of maize-derived ethanol are required, even when one accounts for the losses from electricity transmission, battery charging and grid storage.
- The water needed to grow crops for ethanol is another debating point. For India, sugarcane is the cheapest source of ethanol. On average, a tonne of sugarcane can produce 100 kg of sugar and 70 litres of ethanol — meaning, a litre of ethanol from sugar requires 2,860 litres of water. There has been, therefore, a move toward waste-based extraction, such as through coarse grains. But supply may still be a problem, though the Niti Aayog report sounds sanguine on this count — “the roadmap estimates ethanol production from domestic grains will increase a whopping fourfold by 2025.” The abnormally wet monsoon seasons may have helped in recent years to raise grain output, but in its August 2021 analysis The International Council on Clean Transportation (ICCT) is sceptical that those production increases can be sustained.
The food security concerns
- There can be impact on crop output meant for food and fodder.
- There are indications that more sugarcane is being grown and the Government of India encouraged more corn production, with its use for ethanol production cited as a reason for this push. Sugar and cane production that ends up in the petrol tank cannot also appear on the dinner plate, in animal fodder, be stored in warehouses, or be exported.
- Climate change-induced heatwaves are a worrying factor and can lead to lower-than-expected harvests with little notice. Global corn, or maize, production is down, and this adds an incentive for India to try and export more.
- In France, the corn harvest has dipped by 19%, and reductions in forecast production have been seen in at least seven other countries in Europe.
- U.S. production expectations have also been revised slightly downward.
4 . Facts for Prelims
Context: The Railways conducted a test run of its longest freight train, Super Vasuki, as part of the Azadi Ka Amrit Mahotsav celebrations. The 3.5-km-long freight train covered the distance between Korba in Chhattisgarh and Rajnandgaon in Nagpur and was run by the South East Central Railway (SECR).
About Super Vasuki
- Super Vasuki is a 3.5-km-long freight train with 295 wagons carrying 27,000 tonnes.
- The freight train gets its name from Vasuki, the Hindu god of serpents. Shiva’s snake, Vasuki, is portrayed as being around his neck. The snake is said to have a gem on his head called a Nagamani.
- The national transporter claimed that this is the longest and heaviest freight train that the Railways have ever operated and that it crosses a station in around four minutes.
- Super Vasuki carries enough coal to operate a 3000 MW power plant for a whole day.
- This can transport three times as much coal in a single trip as the 90-car, 100-ton rail rakes that are now in use.
- The train was formed by amalgamating five rakes of goods trains as one unit.
- The Railways plans to use this arrangement (longer freight trains) more frequently, especially to transport coal in peak demand season to prevent fuel shortages in power stations.
Context: The Assembly Committee on Estimates determined the progress of schemes being implemented through the departments of Agriculture, Forestry, Environment and Climate Change, Municipal Administration and Water Supply Department, Small Ports, and Highways.
About Estimate Committee
- The Estimates Committee is a Committee of the Lok Sabha.
- Establishment: The motion for election of the first Estimates Committee was adopted by the Provisional Parliament on 3rd April 1950 and the Committee was elected on 10th April 1950.
- Members: The Committee consists of not more than 30 Members from Lok Sabha who shall be elected by the House every year from amongst its members according to the principle of proportional representation by means of a single transferable vote.
- Chairman: The Speaker is empowered to appoint the Chairman of the Committee from amongst its members.
- A Minister cannot be elected as a member of the Committee and if a member after selection to the Committee is appointed a Minister, the member ceases to be a Member of the Committee from the date of such appointment.
- The term of office of the Committee is one year.
Functions of the Committee
- Rule 310 of the Rules of Procedure and Conduct of Business in Lok Sabha defines the scope of functions of the Committee:
- to report what economies, improvements in organization, efficiency or administrative reform, consistent with the policy underlying the estimates, may be affected;
- to suggest alternative policies in order to bring about efficiency and economy in administration;
- to examine whether the money is well laid out within the limits of the policy implied in the estimates; and
- to suggest the form in which the estimates shall be presented to Parliament.
- The Committee does not exercise its functions in relation to such Public Undertakings as are allotted to the Committee on Public Undertakings by the Rules of Procedure and Conduct of Business of Lok Sabha or by the Speaker.
- F-INSAS stands for Future Infantry Soldier As A System, a programme for infantry modernisation aimed at increasing the operational capability of the soldier. As part of the project, soldiers are being equipped with modern systems that are lightweight, all-weather-all-terrain, cost-effective and low maintenance.
- The full-gear of the F-INSAS system includes an AK-203 assault rifle, which is a Russian-origin gas-operated, magazine-fed, select-fire assault rifle. It has a range of 300 metre, and is being made at Korwa near Amethi in a Russia-India joint venture. A contract for over six lakh AK-203 rifles was signed in December last year between the Ministry of Defence and the Indo-Russian Rifles Private Limited (IRRPL).
- On the weaponry front, other than the AK-203, the F-INSAS includes a multi-mode hand grenade, which can be used in defensive and offensive modes.
- In defensive mode, the grenades are to be hurled when the thrower is in a shelter or has a cover, while the target is in the open and can be harmed by fragmentation. In the offensive mode, the grenades do not fragment and the adversary is harmed by the blast or is stunned. The weapon kit also has a multi-purpose knife for close quarters combat.
- Apart from this, the F-INSAS provides soldiers with ballistic helmets and ballistic goggles for protection against small projectiles and fragments, along with a bullet-proof vest. The helmet and the bullet-proof jacket are capable of protecting the soldier against 9 mm bullets and ammunition fired from AK-47 rifles. For target acquisition, the soldier has rifle-mounted holographic sight for fast and accurate aiming with a range of 200 metre. The helmet has a mounted night-vision device for operating in low-light conditions, and the option of installing a thermal imager sight. Thermal imagers covert infrared energy from objects into thermal images.
- The F-INSAS also comes with hands-free, secured advanced communications set for real-time exchange of information with the command post and fellow soldiers for enhanced situational awareness.
- Most importantly, all these items have been sourced from Defence Public Sector Undertakings, and private Indian industries. They have been indigenously designed by the Indian entities, including the DRDO and the ordnance factories ecosystem.
- Nipun mines are indigenously designed and developed anti-personnel mines, termed by the DRDO as ‘soft target blast munition’. These mines are meant to act as the first line of defence against infiltrators and enemy infantry.
- They have been developed with the efforts of Armament Research and Development Establishment, a Pune-based DRDO facility, and Indian industry. Anti-personnel mines are meant to be used against humans as against anti-tank mines that are aimed at heavy vehicles.
- They are smaller in size and can be deployed in large numbers. The Army has said that the mine will provide protection to the troops on the borders and is more potent and effective than the existing anti-personnel mine in its arsenal.
Landing craft assault
- The Landing Craft Assault (LCA) is meant to serve as a replacement for the boats with limited capabilities currently in use in the Pangong Tso lake.
- The LCA, which has been indigenously developed by Goa-based Aquarius ShipYard Limited, is said to have better launch, speed and capacity to operate across water obstacles in eastern Ladakh. Similar vessels are already in operation in the Indian Navy.