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Current Events 23 March 2016



23 MARCH 2016

India to host BRICS summit in October

India will host the eighth annual summit of BRICS from October 15-16 in Goa, in its capacity as chair of the influential bloc comprising five countries — Brazil, Russia, India, China, South Africa.
External Affairs Minister Sushma Swaraj made the announcement during a function where she also unveiled a logo and a website of the summit. India assumed chairmanship of BRICS from Russia on February 15 and will hold the position till December 31. The seventh summit was held in Ufa, Russia.

For inclusive solutions

The External Affairs Minister said India’s core theme during BRICS chairmanship will be building responsive, inclusive and collective solutions for the grouping.The logo for the summit is a lotus with colours from all the five member-countries and a traditional ‘namaste’ in the centre.“We will adopt a five-pronged approach during our chairmanship. It will comprise Institution Building, Implementation, Integration, Innovation, and Continuity with Consolidation (IIIIC or I4C),” the Minister said.She said India’s emphasis would be on institution bulding, implementation of commitments flowing from past summits, and exploring synergies among the existing mechanisms.The groupings has been pushing for greater economic growth among the member countries and reform of global financial institutions. It  has set up the New Development bank headquartered in Shanghai with India’s K.V Kamath serving as its chief.

Film festival and more.

Ms. Swaraj said that during Indias’s chairmanship, “over 50 sectoral meetings will be organised at the ministerial official, technical, and track II levels.”The Minister said enhancing “greater people-to-people participation” would be among the top priorities during the BRICS events to be held “throughout the year across the country” .We have also planned a series of events , including the BRICS Under -17 Football tournament, BRICS Film Festival, BRICS Youth Forum , BRICS Wellness Forum, Young Diplomat’s Forum, BRICS Trade Fair, BRICS Friendship cities conclave,besides the think tank and academic forums”, she said.This will give people a greater opportunity to enrich the BRICS process. It would also be an occasion for our BRICS partners to visit different cities and states of India”, The External Affairs Minister added.

Modi to announce n-security plans in U.S.

During the short three-nation visit next week, Prime Minister Narendra Modi will cover two of India’s foreign policy priorities by attending the Nuclear Security Summit in Washington DC, India-EU summit in Brussels and then by flying to Saudi Arabia in his first official visit, the Ministry of External Affairs (MEA) announced .

The 4th Nuclear Security Summit to be held from March 31 to April 1, is significant as this is the last summit under President Barack Obama’s Presidency when countries, including India, will come out with a communiqué for the future of the nuclear security regime which will become a significant diplomatic achievement for President Obama and the world leaders. That apart, as per past summits, on April 1, member countries will also submit latest “progress reports” on steps taken to prevent non-state actors from gaining access to nuclear material. “Prime Minister Modi will also make some specific announcements during his intervention on nuclear security, which will be made public in due course,” MEA spokesperson Vikas Swarup said.

The summit which comes in the backdrop of the terror attacks in Brussels will highlight India’s official concerns on nuclear terrorism and the threat posed by terrorists gaining access to nuclear material.

The summit will also be unique for the big exhibition of the major nuclear energy producing firms at the venue, targeting the growing civilian nuclear energy market in developing countries.

Following the visit to Washington DC, Mr. Modi will undertake the first official visit to Saudi Arabia between April 2 to 3. The visit to Saudi Arabia comes within a year of his visit to Dubai in August 2015. Landing in Riyadh on April 2, Mr. Modi will hold talks on bilateral, regional and global issues of mutual interest with the Saudi King Salman bin Abdulaziz bin Saud. Experts have pointed out that Iran, the rival of Saudi Arabia in the Gulf region, will be alienated by the visit.

LPG for every Indian household

Within a fortnight of the recently announced Union Budget, the Cabinet Committee on Economic Affairs approved the Pradhan Mantri Ujjwala Yojana, earmarking Rs. 8,000 crore for it, with the aim of providing five crore subsidised Liquefied Petroleum Gas (LPG) connections to women of poor households (Below Poverty Line) in the next three years. (The Finance Minister had made a Budgetary provision of Rs.2,000 crore in the current financial year to provide deposit-free LPG connections to 1.5 crore women of BPL families. Further, the Budget announced that the scheme would be continued for two more years to cover five crore households).

The scheme is remarkable for two reasons. First, it has brought focus to the important developmental issue of enabling clean cooking energy. This is because indoor air pollution, caused by smoke from the traditional chulha stove leads to 1.3 million premature deaths in the country every year. Second, the scheme improves the quality of life of poor women whose health interests are usually neglected in household priorities.

The largest rural energy access survey of India which was conducted last year by the Council on Energy, Environment and Water (CEEW) and the Department of Political Science at Columbia University, shows that as many as 95 per cent of LPG-deprived households cite their inability to pay as a barrier to their adopting LPG. Thus, the scheme is well-targeted to address the crucial impediment of a high upfront cost, which has limited the transition towards LPG use in poorer households. While the move is appreciable, other challenges that limit the use of this clean fuel in India must be resolved simultaneously.

Adoption and use gap

One such challenge is the high monthly expenditure incurred which 88 per cent of LPG-deprived households in the survey cited as a barrier. The survey was across 8,566 rural households in 714 villages of Bihar, Jharkhand, Madhya Pradesh, Odisha, Uttar Pradesh and West Bengal. Similarly, National Sample Survey Office (NSSO) data from the past also highlight the low expenditure capacity of poorer households in having access to LPG. However the high recurring cost is not only a problem of purchasing capacity but also a perception and cash-flow issue. An increasing number of rural households rely on commercially procured biomass to meet their cooking energy needs. The rural informal markets for firewood and dung cakes are thriving across India. CEEW analysis suggests that households that buy some or all of their biomass end up paying more than those who rely on LPG. Thus, LPG would be an economically attractive proposition for such households. However, those relying completely on free-of-cost biomass (about 50-60 per cent of the rural population) would possibly opt for the subsidised connection, but would not spend on refilling cylinders regularly. We need to focus on reducing this gap between adoption and sustained use.

In this, a threefold approach is needed. First, creating awareness about the actual cost of fuel and its benefits, especially those related to health, over status quo. Second, tackling the issue of cash flow, especially for the strata of population who find it difficult to pay for the aggregated cost of refilling a large cylinder. Introducing smaller LPG cylinders (2 to 5 kg) for this section could be a solution. Third, leveraging mobile money for LPG payments. As LPG coverage expands in rural areas, the Direct Benefits Transfer of LPG (DBTL) subsidy programme could create additional barriers for economically weaker households. These could be in the form of no bank account or the distance the person travels to have access to banking services. While the Pradhan Mantri Jan-Dhan Yojana has increased the number of rural households with bank accounts, we need innovative payment approaches to fill the gap of last mile access to banking services.

Deepening reach

Limited LPG distribution networks in rural areas also need simultaneous attention to cover five crore households in the next three years. The government and oil marketing companies have already established at least one LPG distributor in each block. But much additional work needs to be done. Most rural areas are served under the Rajiv Gandhi Gramin LPG Vitaran Yojana (RGGLVY). Here, the consumer has to collect the cylinder from a dealer. Such consumers typically travel 3-11 km (one way). Innovation is required in distributing LPG in the rural areas, beyond the traditional realm of a dealership model. Leveraging rural supply chains, only for the delivery of the regulated commodity, could be one such approach.

Finally, the third major barrier — awareness and administrative issues. About 40 per cent of LPG-deprived households in rural areas cite a lack of information about the process of getting a connection as a challenge. Therefore, awareness creation in rural areas and among the urban poor is a must. For households in urban slums, the absence of residential proof or a lack of interest by urban dealers to serve them also pose a barrier. The government’s scheme of selling 5 kg LPG cylinders at petrol pumps and kirana stores may help, as proof of address is not required. However, its limited penetration and retail pricing still make it challenging for many poor households. Opening exclusive dealerships for smaller cylinders (2 and 5 kg), with specific provisions to serve urban poor areas, could help overcome some of these challenges.

It is welcome that the government has recognised the importance of clean cooking energy with the launch of this mammoth scheme. However, we need to go beyond subsidising connections and fuel costs and focus on issues of cash flow, awareness, availability and administration. Only such a comprehensive approach will help poor households have a better life.


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