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Class PPT Economy Current Affairs Lecture 1 03 Sept 22
Class PPT Economy Current Affairs Lecture 1 03 Sept 22
INDIAN ECONOMY
120
100
80
60
40
20
0
GS -I GS-II GS-III
PRELIMS: INDIAN ECONOMY
UPSC Syllabus: Economic and Social Development – Sustainable Development, Poverty, Inclusion,
Demographics, Social Sector initiatives, etc.
PILLAR LIST OF CHAPTERS
Pillar 1: Banking 1. RBI. 2. Structure of Banking 3. Monetary Policy
and Finance 4. Financial Inclusion. 5. Capital Market 6. Money Market
7. Terms related to Banking 8. Inflation 9. Insurance sector
Pillar 2: Public 10. Taxation System in India
Finance
Pillar 3: External 11. Balance of Payments (BoP)
Sector
Pillar 4: 12. IMF 13. World Bank 14. WTO. 15. Important Organizations in news
International
Institutions
Pillar 5: 16. Agriculture 17. Industry 18. Services. 19. Infrastructure. 20. Planning in India
Government
Initiatives/Policies 21. PSUs in India. 22. LPG Reforms. 23. Inclusive Growth- Poverty, Unemployment, Indices etc.
Pillar 6: Core 24. Calculation of National Income
Concepts 25. Core Concepts from NCERT Textbooks- Sectors of Economy, Micro-economic concepts etc.
INDIAN ECONOMY: PRELIMS
27.5
22.5
17.5
12.5
7.5
2.5
Prelims 2016 Prelims 2017 Prelims 2018 Prelims 2019 Prelims 2020 Prelims 2021 Prelims 2022
Banking 5 6 7 5 6 8 6
and Fi-
nance
Interna- 11 5 5 4 2 1 2
tional
Trade/
Institu-
tions/
Index
Govern- 8 8 5 10 9 1 3
ment
Schemes
/ Poli-
cies/ Ini-
tiatives
External 1 1 0 5 5 2 3
Sector
Taxation 3 2 3 0 1 2 3
Core 0 0 4 3 0 1 1
Concepts
INDIAN ECONOMY: MAINS
137.5
112.5
87.5
62.5
37.5
12.5
Mains 2017 Mains 2018 Mains 2019 Mains 2020 Mains 2021
Agriculture + Land Re- 50 60 60 50 50
forms + Food Processing
+ PDS
Inclusive Growth + Bank- 35 25 25 20 25
ing and Finance
Budgeting and Taxation 15 10 25 15 10
Industrial Policy + Em- 15 15 0 0 0
ployment + External Sec-
tor
Infrastructure and In- 10 0 0 30 15
vestment
Structure of Current Affairs Classes
Prelims Mains
• Overview of Electricity Sector: • DISCOM REFORMS: Need, Initiatives
• Share of different Sources in Installed
and Strategies needed
Capacity
• Achievements in Renewable Energy
• Initiatives for Reforms in DISCOMs
DISCOM REFORMS: NEED, INITIATIVES AND STRATEGIES NEEDED
2. The distribution sector has been the Achilles’ heel of the power sector. What are the major reforms introduced by the
Government to reform the power distribution sector. ( 10 Marks, 150 Words) (Initiatives)
3. The Electricity distribution sector is in dire need of major overhaul. In the light of this statement, discuss major
reforms which must be introduced to improve the financial viability of DISCOMs (Strategies)
4. Do you think Privatization of DISCOMs would help us achieve their financial and operational turn around? Give
arguments in support of your answer. ( 15 Marks, 250 Words) (Privatization of DISCOMs)
Share of Different Sources in Installed Share of Different Sectors in
Capacity Installed Capacity
2%
12%
24%
50%
28%
59%
26%
Thermal Renewable
Large Hydropower Nuclear Power Centre State Private Sector
Share of Different Renewable Energy Sources (in MW)
60,000
50,000
40,000
30,000
57,000
46,000
20,000 40,000
10,000
10,000
4,800
0 477
r r d s er gy
la e in as r
So ow W om ow e
rop Bi op En
d d r to
y y te
H lH as
rge al W
La Sm
Progress and Achievements in Renewable energy sector
• India stands 4th in RE power capacity, 4th in Wind power, and 5th in Solar Power capacity.
• Total Installed Capacity of Renewable energy (including large hydropower above 25 MW): 1.5 lakh MW
• Share of Renewable energy (including large hydropower above 25 MW) in total installed capacity: 40%
• Top 3 States in Installed Wind Power: Tamil Nadu, Gujarat and Maharashtra
• Top 3 States in Installed Solar Power: Karnataka, Rajasthan and Tamil Nadu
Prelims 2022
Consider the following statements :
1. Gujarat has the largest solar park in India
2. Kerala has a fully solar powered International
Airport
3. Goa has the largest floating solar photovoltaic
project in India.
No ”One Size Fits all approach”. Different models in different states depending upon the consumer mix and geography- Private
DISCOMS, Franchise Model or state owned DISCOMs.
Power Theft Poor Billing and Collection Long term PPAs: Fixed and Variable
Efficiency Cost Higher Dependence on States:
Higher Fiscal Deficit
Introduction
India has made rapid strides in power sector. However, DISCOMs incur huge losses (Rs 75,000 crores), which in turn reduces
their ability to pay dues to power generating companies and repay loans to Banks leading to negative domino effect.
The distribution sector has been the Achilles’ heel of the power sector. What are the major reforms introduced by the
Government to reform the power distribution sector. ( 10 Marks, 150 Words).
Body
The Government has introduced number of reforms to address the structural, operational and managerial inefficiencies of the
DISCOMs.
Electricity Amendment Act, 2003:
Established Central Electricity Regulatory Commissions (CERCs) and State Electricity Regulatory Commission (SERCs).
Open access policy
Deen Dayal Upadhyaya Gram Jyoti Yojana: Focuses on feeder separation.
UDAY Scheme: Financial turnaround through States taking over 75% of DISCOM debt
Reforms based Results linked Revamped Power Distribution Scheme: Conditional financial assistance to DISCOMs on meeting
criteria such as reduction in AT&C losses.
Private Participation in DISCOMs through (a) Franchise Model (Bhiwandi, Maharashtra) and (b) Privatisation of DISCOMs (Delhi,
Ahmedabad, Odisha etc.)
Competition in the distribution sector and providing Retail Choice to Consumers (Budget 2021-22)
Conclusion
The distribution sector is a key to realize Government’s goals such as 24X7 Power, Make in India, Aatma Nirbhar Bharat etc.
Hence, the Electricity amendment Bill 2022 is a step in the right direction.
The power distribution continues to be the weakest link in the supply chain of the power sector. In the light of this statement,
discuss various constraints and challenges faced by DISCOMs in India.
India has made rapid strides in power sector. It is the 3 rd largest producer of electricity and almost every citizen has access to grid
electricity. However, the sector still faces significant challenges. Most Discoms incur heavy losses ( around Rs 75,000 crores) due
to structural, operational and managerial inefficiencies.
The power distribution continues to be the weakest link in the supply chain of the power sector. In the light of this statement,
discuss various constraints and challenges faced by DISCOMs in India.
The Government has taken measures such as UDAY Scheme, Electricity Amendment Act, 2003, Open Access policy etc. to bring
about financial and operational turnaround of DISCOMs. However, these initiatives have failed on account of the following:
Lack of Independence and Autonomy of the SERCs set up under EC Act, 2003. The political populism in fixing electricity tariffs
has led to cross-subsidization; higher losses; hurt domestic manufacturing and led to poor revenue realization.
Higher AT&C losses: Higher gap between average cost of supply (ACS) and the average revenue realised (ARR) due to
Transmission losses, Commercial losses (Power theft, absence of metering, inefficiencies in bill collection etc.)
Global average: 8% ( USA- 6%; China- 8%); India: 22%; Total losses: Rs 75,000 ( FY 2021-22)
Non-payment of Dues to Thermal power plants: Power procurement accounts for almost 80% of expenditure of discoms.
Discoms have oversubscribed to expensive and long-term thermal PPAs based on incorrect estimates of power demand. The
fixed costs of the excess capacity must be paid, even when no power is generated. Non-payment of dues has hindered the
investment in power generation, particularly, Renewable energy sector.
Higher dependence on States: The poor financial position of DISCOMs leads to their higher dependence on state governments
leading to higher Fiscal deficit of the states.
Monopolisation: Presently, DISCOMs enjoy monopoly in distribution of electricity leading to absence of competition, higher
inefficiencies and poor service delivery.
The power distribution continues to be the weakest link in the supply chain of the power sector. In the light of this statement,
discuss various constraints and challenges faced by DISCOMs in India.
The distribution sector is a key to realize Government’s ambitious goals such as 24X7 Power, Make in India, Aatma Nirbhar Bharat
etc. Going forward, there is a need to bring about reforms such as Privatization of DISCOMs, Retail choice to consumers, lower
AT&C losses etc. The Draft Electricity Amendment Bill, 2020 and newly launched Revamped Power sector scheme are steps in the
right direction.
DISCOM REFORMS: NEED, INITIATIVES AND
STRATEGIESOBLIGATION
RENEWABLE PURCHASE NEEDED (RPO) POLICY
Prelims
Details about RPO Policy
DISCOM REFORMS: NEED, INITIATIVES AND
STRATEGIESOBLIGATION
RENEWABLE PURCHASE NEEDED (RPO) POLICY
Which among the statements given above is/are correct? Select the correct answer using the code given below:
(a) 1 only (a) 2 only
(b) 2 only (b) 1 and 4 only
(c) Both 1 and 2 (b) 1, 2 and 4 only
(d) Neither 1 nor 2 (c) 2, 3 and 4 only