AMIGOS IAS Daily Current Affairs (26^th July 2024)

Why AI’s present and future bring some serious environmental concerns

GS 3: Environment and Biodiversity: AI’s environmental concerns

Why is it in the news?

• Though Artificial intelligence (AI) offers significant benefits, such as optimizing processes to eliminate inefficiencies and reduce emissions, however, it also brings serious environmental concerns.
• In its 2023 annual environment report, Google reported a 13% increase in emissions, primarily due to increased electricity consumption in its data centres, which consumed 17% more electricity in 2023. This trend is expected to continue with the growing use of AI tools.

More about the news

• AI, expected to drive transformative changes, has a substantial emissions footprint. Studies show that a simple AI query, such as those posted to OpenAI’s ChatGPT, can use between 10 and 33 times more energy than a regular Google search, with image-based AI searches consuming even more energy.
• AI models perform complex tasks, processing and formulating responses by sifting through large amounts of data, requiring more electrical signals. This increased workload generates more heat, necessitating more powerful cooling systems in data centres.
• As AI tools become more widely deployed, their impact on global energy consumption is expected to rise sharply. Currently, data centres account for 1% to 1.3% of global electricity demand, which could double by 2026, according to the International Energy Agency (IEA).
• In regions like Ireland and the United States, data centres already consume a significant share of national electricity.
• Besides electricity, there is increased demand on water resources for cooling data centres. For example, the centre serving OpenAI’s GPT-4 model in Iowa consumed 6% of the district’s water supply in July 2022. With rapid AI deployment expected in India, experts emphasize the need for efficient processes to minimize environmental impacts.
• However, some estimates suggest that large-scale AI deployment could reduce global emissions. A Boston Consulting Group study found that applying AI to corporate and industrial practices could reduce global emissions by 5-10% by 2030, generating $1.3 trillion to $2.6 trillion in value through additional revenues or cost savings.
• Emissions reductions can occur if AI monitors and predicts emissions in existing processes, optimizing them to eliminate wastage.

Supreme Court recognised states’ powers to tax mining activities

GS 2: Polity and Governance: State tax on mining activities

Why is it in the news?

• India’s Supreme Court ruled that states can tax mining activities and collect “royalties” from mining leaseholders.
• This nine-judge Constitution Bench decision allows states to generate additional revenues from mining taxes and land used for these activities.
• The case, Mineral Area Development Authority v M/s Steel Authority of India, was decided by an 8-1 split, with Chief Justice D Y Chandrachud authoring the majority opinion.
• One dissenting judgment warned of the potential adverse effects of granting mineral taxation rights to states.

More about the news

Key Observations by the Court:

• Royalties are fees for using a product, like land for mining. Under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDRA), leaseholders must pay royalties to landowners.
• Background of the case: In 1989, the Supreme Court ruled in India Cement Ltd v State of Tamil Nadu that states could collect royalties but not impose additional mining taxes, as the Centre had overriding authority.
• Later in 2004, a five-judge Bench identified a typographical error in the 1989 ruling, which had incorrectly classified royalties as a tax. This prompted to current review by a nine-judge Bench.
• The majority held that royalties are not taxes due to a “conceptual difference.” Royalties are payments under contracts between the leaseholder and the lessor, while taxes fund public purposes. Therefore, royalties are in exchange for exclusive privileges in minerals, not for public expenditure.
• Further, the court has examined if states could tax mineral development activities or if it was solely under the Centre’s domain via the MMDRA.
• As the term “land” in Entry 49 of list II (State List) gives states the power to tax mineral rights, while the Entry 54 of List I (Union list) gives the Centre regulatory power over mines and minerals, the court ruled that royalties are not taxes, allowing states to impose taxes on mineral development activities. Though Parliament can limit states’ taxing powers but not impose taxes directly.

Additional Information:

Difference Between Royalty and Tax:

In 2021, the Supreme Court of India clarified the distinction between ‘royalty’ and ‘tax’:

Royalty:

• Origin: Arises from an agreement between parties.
• Nature: It is compensation paid for the rights and privileges granted to the grantee.
• Relationship: Directly linked to the benefit or privilege conferred upon the grantee.
• Specificity: Tied to the exploitation of resources or usage of a privilege specified in the agreement.
• Precedents: The Court cited cases such as Hingir-Rampur Coal Co. Ltd. vs. State of Orissa (1961) and State of West Bengal vs. Kesoram Industries Ltd. (2004) to illustrate that royalties are contractual obligations with direct benefits.

Tax:

• Origin: Imposed under statutory authority without reference to any special benefit granted to the payer.
• Nature: Enforced by law and does not require the taxpayer’s consent.
• Purpose: Collected for public purposes, representing a common burden borne by all citizens.
• Specificity: Unlike royalties, taxes do not involve a quid pro quo arrangement. Payments are mandatory and not linked to specific privileges or benefits.
• Precedents: The Court referenced cases like State of Himachal Pradesh vs. Gujarat Ambuja Cement Ltd. (2005) and Jindal Stainless Ltd. vs. State of Haryana (2017) to define the characteristics of taxes.

About Mines and Minerals (Development and Regulation) Act, 1957:

• MMDR 1957 is a cornerstone legislation in India that regulates the mining sector. This Act has been amended several times to address evolving needs and challenges, ensuring it aligns with national economic and security interests.
• Primary Objectives:
• Develop the mining industry.
• Ensure mineral conservation.
• Enhance transparency and efficiency in mineral exploitation.

Key Amendments:

• 2015 Amendment:
• Auction Method: Mandated the auctioning of mineral concessions to improve transparency.
• District Mineral Foundation (DMF): Established DMF to benefit regions and communities affected by mining.
• National Mineral Exploration Trust (NMET): Created NMET to promote mineral exploration.
• Penalties for Illegal Mining: Imposed stringent penalties to combat illegal mining activities.
• 2016 and 2020 Amendments: Addressed specific sectoral issues to ensure effective functioning.
• 2021 Amendment:
• Captive and Merchant Mines: Unified the categories, allowing captive mines to sell up to 50% of their production in the open market after meeting their own needs. Merchant mines produce minerals for open market sale.
• Auction-Only Concessions: Ensured that all private-sector mineral concessions are granted exclusively through auctions.
• 2023 Amendment:
• Exploration Licenses for Critical Minerals: The amendment adds provisions for Exploration Licenses, to attract foreign direct investment and engage junior mining companies in exploring critical minerals.
• Revised Mineral List: Removes 6 specific out of 12 atomic minerals, including lithium, beryllium, and titanium, from the atomic minerals list, thereby facilitating broader exploration and development.
• Centralized Auction with State Implementation: Grants the Central Government the authority to exclusively auction mining leases and composite licenses for certain critical minerals, while the State governments will handle the grant of these licenses.
• Strategic Importance: Emphasized the exploration and extraction of minerals such as lithium, graphite, cobalt, titanium, and rare earth elements to support India’s economic development, energy transition, and net-zero emissions goal by 2070.

These amendments collectively aim to enhance exploration, reduce import dependence, and encourage private sector involvement in the mining of critical minerals.

Prelims Practice Questions:

Q. With reference to the management of minor minerals in India, consider the following statements: (UPSC 2019)

1. Sand is a ‘minor mineral’ according to the prevailing law in the country

2. State Governments have the power to grant mining leases of minor minerals, but the powers regarding the formation of rules related to the grant of minor minerals lie with the Central Government.

3. State Governments have the power to frame rules to prevent illegal mining of minor minerals.

Which of the statements given above is/are correct?

(a) 1 and 3 only

(b) 2 and 3 only

(c) 3 only

(d) 1, 2 and 3

Answer: A

Q. What is/are the purpose/purposes of ‘District Mineral Foundations’ in India? (UPSC 2016)

1. Promoting mineral exploration activities in mineral-rich districts

2. Protecting the interests of the persons affected by mining operations

3. Authorizing State Governments to issue licences for mineral exploration

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 only

(c) 1 and 3 only

(d) 1, 2 and 3

Answer: B

India’s Illegal Coal Mining Problem

GS 2: Polity and Governance: Illegal Coal Mining

Why is it in the news?

• Illegal coal mining in India is widespread, with numerous fatal incidents due to unsafe conditions. For instance, on July 13, 2023, three workers died of asphyxiation in an illegal mine in Gujarat’s Surendranagar district.

More about the news

• The Coal Mines (Nationalisation) Act, 1973 regulates coal mining, restricting it to authorized entities. Illegal mining, however, persists in abandoned or shallow mines, particularly in remote areas where regulatory enforcement is weak.
• Addressing illegal mining is the responsibility of State governments, as it is considered a Law and Order issue.

Several factors drive illegal coal mining in India:

1) The high demand for coal, a critical energy source, often exceeds legal supply, leading to illegal mining. Poverty and unemployment in coal-rich regions prompt local populations to engage in mining activities.

2) Weak enforcement of mining regulations and alleged political support for illegal mining further exacerbate the problem. For instance, allegations have been made that political leaders in states like Assam and Meghalaya are involved in or support illegal mining operations.

3) Workers in illegal coal mines face severe safety hazards due to inadequate safety equipment and protocols.

4) The lack of proper structural support in these mines leads to frequent cave-ins, landslides, and explosions. For example, in the Surendranagar incident, workers died from carbon monoxide poisoning.

5) Many miners work without helmets, masks, or other essential protective gear.

6) Further, the absence of training and emergency response measures heightens the risk of accidents and chronic health issues, including poisoning from toxic substances.

• Controlling illegal coal mining presents significant challenges due to economic, social, and political factors. The legal framework governing mining is complex, contributing to bureaucratic inefficiencies that hinder effective enforcement.
• Local economies that rely on mining can perpetuate illegal activities even after official operations cease. The high demand for coal and the resulting illegal mining are difficult to control, with regulatory efforts often falling short.

Mains Practice Question

Q. Despite India being one of the countries of Gondwanaland, its mining industry contributes much less to its Gross Domestic Product (GDP) in percentage. Discuss. (UPSC 2021)

Q. “In spite of adverse environmental impact, coal mining is still inevitable for development”. Discuss. (UPSC 2017)

Jaishankar pushes for urgency in resolving stand-off at LAC

GS 2: International Relations: India-China

Why is it in the news?

• External Affairs Minister S. Jaishankar met with Chinese Foreign Minister Wang Yi in Vientiane, Laos, urging a swift resolution to the ongoing military stand-off at the Line of Actual Control (LAC).
• This meeting, following their previous talks at the SCO Summit in Kazakhstan, emphasized the need for urgent action to resolve the four-year-long standoff and stabilize bilateral relations.

More about the news

• Jaishankar highlighted the importance of stable ties between India and China, given their roles as major global economies.
• Both ministers agreed to expedite discussions through an early meeting of the Working Mechanism on Consultation and Coordination on India-China Border Affairs (WMCC), which includes officials from the External Affairs Ministry, border agencies, and military.
• Despite previous disengagements from several flashpoints, further progress is stalled, particularly concerning Chinese troops in the Demchok and Depsang sectors. Jaishankar stressed the need to respect past agreements and complete the disengagement process.
• The talks occurred amidst speculation about the Indian government’s potential relaxation of restrictions on Chinese companies, as indicated by the Economic Survey, which suggested encouraging more Foreign Direct Investment (FDI) from China.
• Concurrently, the Chinese Embassy in Delhi called for India to ease economic and business ties, noting the decline in FDI, tourist numbers, and direct flights between the two nations.

Additional Information:

What is LAC- the Line of Actual Control?

• The Line of Actual Control (LAC) is the de facto boundary separating Indian-administered territory from Chinese-administered territory.
• India defines the LAC as approximately 3,488 km in length, whereas China’s perspective places it at around 2,000 km.
• It spans three sectors: the eastern sector encompassing Arunachal Pradesh and Sikkim, the middle sector covering Uttarakhand and Himachal Pradesh, and the western sector located in Ladakh.
• The LAC exists as a conceptual boundary, lacking mutual agreement or physical demarcation on maps or on the ground between the two nations.

Disagreements Surrounding the LAC:

• Eastern Sector: The LAC in this region largely follows the 1914 McMahon Line, though there are minor disputes regarding ground positions.
• Western Sector: Significant disputes trace back to letters exchanged between Chinese Prime Minister Zhou Enlai and Indian Prime Minister Jawaharlal Nehru in 1959, with the LAC being described vaguely on Chinese maps.
• Chinese Claims: After the 1962 War, China asserted that it had withdrawn to 20 km behind the LAC.
• Doklam Crisis (2017): During this period, the Chinese Foreign Ministry urged India to adhere to the “1959 LAC,” but subsequent clarifications left room for continued ambiguity and differing interpretations by both nations.

India’s Response to China’s LAC Designation:

• Initial Rejection (1959-1962): India initially rejected the LAC concept due to concerns over its vague definition and the potential for China to use it to alter ground realities through military force.
• Shift in Approach (Mid-1980s): Increased border encounters prompted India to review and adjust its approach to patrolling boundaries, leading to a reassessment of the LAC.
• Formal Acceptance (1993): India formally accepted the LAC concept with the signing of the Agreement to Maintain Peace and Tranquility at the LAC.
• Map Exchanges: While maps were exchanged for the middle sector of the LAC, the Western sector’s map-sharing process has been incomplete, with formal exchanges not occurring and efforts to clarify the LAC stalling since 2002.
• Recent Conflicts: Significant confrontations have occurred in Galwan Valley in Ladakh (2020) and Tawang in Arunachal Pradesh (2022), with observers noting an increase in serious military confrontations since 2013.

About Working Mechanism for Consultation and Coordination on India-China Border Affairs (WMCC):

• Established in 2012, the WMCC serves as a vital institutional mechanism for consultation and coordination in managing the India-China border areas, fostering dialogue and cooperation, and enhancing communication between the border security personnel of both nations.
• Composition: The WMCC is led by joint secretary-level officials from both India and China, who assist the Special Representative for boundary talks, currently held by NSA Ajit Doval.
• Recent Status: The 29th meeting of the Working Mechanism for Consultation & Coordination on India-China Border Affairs (WMCC) took place in Beijing on 27 March 2024. During this meeting, both sides underscored the importance of maintaining regular communication through diplomatic and military channels. They also emphasized the need to uphold peace and tranquillity along the border in line with existing bilateral agreements and protocols.
• Purpose:
• To restore normalcy in bilateral relations between India and China.
• To reestablish peace along the Line of Actual Control.

Mains Practice Question:

Q. Border management is a complex task due to difficult terrain and hostile relations with some countries. Elucidate the challenges and strategies for effective border management. (UPSC 2016).

Minister launches revamped Model Skill Loan Scheme

GS 3: Economy: Sill Loan Scheme

About the news

• Skill Development Minister Jayant Chaudhary unveiled the revamped Model Skill Loan Scheme on 25^th July 2024. This update follows Finance Minister Nirmala Sitharaman’s announcement of increasing the maximum loan amount for high-end skills courses from ₹1.5 lakh to ₹7.5 lakh.
• The previous Credit Guarantee Fund Scheme for Skill Development, initiated in 2015, faced challenges with only ₹115.75 crore in loans disbursed to 10,077 borrowers by March 31.
• The low uptake was attributed to the scheme’s limited loan size and restricted lending network, which only included Indian Banking Association member institutions.
• The revamped scheme expands the lending network to include Non-Banking Financial Companies and small finance banks, aiming to cover a wider range of skill courses and offer higher loan limits.
• Under the scheme, education and upskilling opportunities will be provided to 25,000 youth every year across the country.
• Thus, the New Model Skill Loan Scheme aims to facilitate access to higher-cost advanced skill courses by providing essential financial support to deserving students, thereby overcoming financial barriers and enabling pursuit of skill training.

Additional Information:

About Skill Loan Scheme:

• This scheme was launched in July 2015 to provide institutional credit to individuals undertaking skill development courses aligned to National Occupations Standards and Qualification Packs.
•  These courses are conducted by training institutes adhering to the National Skill Qualification Framework (NSQF) and resulting in certifications, diplomas, or degrees.
• This scheme applies to all member banks of the Indian Banks’ Association (IBA) and other banks and financial institutions as directed by the RBI, offering operational guidelines for implementing the skilling loan scheme.
• Ministry of Skill Development and Entrepreneurship (MSDE), through a November 2015 notification, brought into force the Credit Guarantee Fund for Skill Development (CGFSSD) for all skill loans sanctioned on or after 15 July 2015, to be administered by the National Credit Guarantee Trust Company (NCGTC).
• Banks can apply to the NCGTC for a credit guarantee against defaults, and the NCGTC will provide this guarantee at a nominal fee which shall not exceed 0.5% of the amount outstanding.
• The guarantee cover will be for a maximum of 75% of the outstanding loan amount (including interest, if any).

Report: Addressing risk factors could reduce dementia cases by 40%

GS 2: Society: Dementia

About the news

• India is facing a growing challenge with age-related neurodegenerative disorders such as Alzheimer’s and Parkinson’s due to its rapidly aging population.
• As of 2019, over 139 million Indians were aged 60 and above, making up more than 10% of the population. By 2050, this demographic is expected to double to 19.5%, with 319 million seniors.
• The decline in the Total Fertility Rate (TFR), which has fallen from 5.2 in 1971 to 2.0 in 2020, has contributed to this aging trend, as people live longer and have fewer children.
• TFR is the total number of children likely to be born for a woman (15-49 years) over her lifetime.
• The Lancet Commission’s 2020 report underscores the need for policy reforms and targeted interventions to manage the growing dementia crisis in India.
• The report highlights modifiable risk factors such as hypertension, obesity, smoking, and social isolation, which are exacerbated by the country’s demographic shift.
• The prevalence of obesity has increased, with a notable rise from 21% to 24% among women and from 19% to 23% among men since the last survey. Addressing these risk factors through public health initiatives and lifestyle changes could prevent up to 40% of dementia cases.

To combat this challenge, following measures to be taken:

1) India must invest in early detection and intervention, improve healthcare infrastructure, and address risk factors such as air pollution, hypertension, and traumatic brain injury (TBI).

2) As air pollution contributes to cognitive decline, stricter regulations and sustainable urban planning are necessary.

3) Public campaigns should promote healthy lifestyles, while safety measures should address TBI risks.

4) Additionally, expanding healthcare facilities, training professionals in geriatric care, and increasing research into dementia are crucial steps.

• Further, the Government initiatives like the National Programme for Health Care of the Elderly (NPHCE) and Health and Wellness Centres (HWCs) reflect the commitment to improving elderly care and addressing the needs of the aging population.