7 June 2016

10 technologies shaping the future of solar power

10 technologies shaping the future of solar power
From bio-solar cells and floating solar farms to energy harvesting trees and transmission of power from space, the future looks quite bright for renewable energy
. Bio-solar cells
For the first time ever, researchers connected nine biological-solar (bio-solar) cells into a bio-solar panel and continuously produced electricity from the panel and generated the most wattage of any existing small-scale bio-solar cells.
Last year, the group took steps towards building a better bio-solar cell by changing the materials used in anodes and cathodes (positive and negative terminals) of the cell and also created a miniature microfluidic-based single-chambered device to house the bacteria instead of the conventional, dual-chambered bio-solar cells.
However, this time, the group connected nine identical bio-solar cells in a 3x3 pattern to make a scalable and stackable bio-solar panel. The panel continuously generated electricity from photosynthesis and respiratory activities of the bacteria in 12-hour day-night cycles over 60 total hours.
The current research is the latest step in using cyanobacteria—which can be found in almost every terrestrial and aquatic habitat on earth—as a source of clean and sustainable energy.
Even with the breakthrough, a typical “traditional” solar panel on the roof of a residential house, made up of 60 cells in a 6x10 configuration, generates roughly 200 watts of electrical power at a given moment. The cells from this study, in a similar configuration, would generate about 0.00003726 watts. So, it isn’t efficient just yet, but the findings open the door to future research of the bacteria itself.
“Once a functional bio-solar panel becomes available, it could become a permanent power source for supplying long-term power for small, wireless telemetry systems as well as wireless sensors used at remote sites where frequent battery replacement is impractical,” said Seokheun ‘Sean’ Choi, an assistant professor of electrical and computer engineering in Binghamton University’s Thomas J. Watson School of Engineering and Applied Science, and co-author of the paper, in a 11 April press statement.
The findings are currently available online and will be published in the June edition of the journal Sensors and Actuators B: Chemical.
2. A new way for converting solar energy into electricity
Researchers from The Hebrew University of Jerusalem in Israel, and the University of Bochum in Germany, reported a new paradigm for the development of photo-bioelectrochemical cells in Nature Energy this January, providing a means for the conversion of solar energy into electricity.
While photosynthesis is the process by which plants and other organisms make their own food using carbon dioxide, water and sunlight, bioelectrochemical systems take advantage of biological capacities (microbes, enzymes, plants) for the catalysis of electrochemical reactions.
In a 19 January press statement, the researchers pointed out that although significant progress has been achieved in the integration of native photosystems with electrodes for light-to-electrical energy conversion, uniting photosystems with enzymes to yield photo-bioelectrocatalytic solar cells remains a challenge.
Hence, the researchers constructed photo-bioelectrochemical cells using the native photosynthetic reaction and the enzymes glucose oxidase, or glucose dehydrogenase. The system comprises modified integrated electrodes that include the natural photosynthetic reaction centre, known as photosystem I, along with the enzymes. The native proteins are electrically wired by means of chemical electron transfer mediators. Photo-irradiation of the electrodes leads to the generation of electrical power, while oxidizing the glucose substrate acts as a fuel.
The system provides a model to harness the native photosynthetic apparatus for the conversion of solar light energy into electrical power, using biomass substrates as fuels. Itamar Willner, a professor at the Hebrew University’s Institute of Chemistry, said in a statement: “The study results provide a general approach to assemble photo-bioelectrochemical solar cells with wide implications for solar energy conversion, bioelectrocatalysis and sensing.”
3. Reshaping solar spectrum to turn light into electricity
Land and labour costs account for the bulk of the expense when installing solar panels since solar cells—made often of silicon or cadmium telluride—rarely account for more than 20% of the total cost. Hence, solar energy could be made cheaper if less land had to be purchased to accommodate the panels. This is best achieved if each solar cell generates more power, but it is not easy.
A team of chemists at the University of California says it has found a way to make this happen. In a paper that was published in Nano Letters, an American Chemical Society publication, the researchers said that by combining inorganic semiconductor nanocrystals with organic molecules, they succeeded in “upconverting” (two low-energy photons into one high-energy photon) photons in the visible and near-infrared regions of the solar spectrum.
The infrared region of the solar spectrum passes right through the photovoltaic materials that make up today’s solar cells, explained Christopher Bardeen, a professor of chemistry in a press release on 27 July 2015. This upconverted photon is readily absorbed by photovoltaic cells, generating electricity from light that normally would be wasted, according to Bardeen.
He added that these materials are essentially “reshaping the solar spectrum” so that it better matches the photovoltaic materials used today in solar cells. The ability to utilize the infrared portion of the solar spectrum could boost solar photovoltaic efficiencies by 30% or more.
Besides solar energy, the ability to upconvert two low-energy photons into one high-energy photon has potential applications in biological imaging, data storage and organic light-emitting diodes, says Bardeen.
4. WaterNest 100
Indian real estate developers can take a lesson or two from this project. EcoFloLife has developed the WaterNest 100 eco-friendly floating house, exclusively designed by renowned Italian architect Giancarlo Zema. It is an over 100 sq. m residential unit, 12 metres in diameter and 4 metres high, made entirely of recycled laminated timber and a recycled aluminium hull.
Balconies are conveniently located on the sides and thanks to the large windows, permit enjoyment of fascinating views over the water. Bathroom and kitchen skylights are located on the wooden roof, as well as 60 sq. m of amorphous photovoltaic panels capable of generating 4kWp, which are used for the internal needs of the floating house. The interior of WaterNest 100 floating house can include a living room, dining area, bedroom, kitchen and bathroom or have other configurations according to the different housing or working needs.
The floating house can be positioned along river courses, lakes, bays, atolls and sea areas with calm waters. The use of materials and sustainable production systems make this unit recyclable up to as much as 98%. It has a hull that is made entirely of aluminium—a light alloy, highly resistant to impact, corrosion and 100% recyclable. Its photovoltaic panels installed on the wooden roof differ from conventional ones due to the low-energy consumption required for their production. From an aesthetic point of view, they can be curved to fit almost any type of roofing.
5. Floating panels, floating solar farms
In many countries, there is a lack of space to install large-scale ground-mount solar systems. As authorities wish to avoid taking away large farmlands for ground-mount solar systems, companies are introducing ecological alternative solutions.
One such firm is French company Ciel & Terre International, which has been developing large-scale floating solar solutions since 2011. Its Hydrelio Floating PV system allows standard PV panels to be installed on large bodies of water such as drinking water reservoirs, quarry lakes, irrigation canals, remediation and tailing ponds, and hydroelectric dam reservoirs.
This simple and affordable alternative to ground-mounted systems is particularly suitable for water-intensive industries that cannot afford to waste either land or water.
This is how it works. The main float is constructed of high-density thermoplastic (HDPE) and is set at a 12-degree angle to support a standard 60-cell PV solar module. A secondary non-slip HDPE float is then used to link the main floats together and provide a platform for maintenance and added buoyancy.
According to Ciel and Terre, the system is easy to install and dismantle, can be adapted to any electrical configuration, is scalable from low- to high-power generation and requires no tools or heavy equipment. It is also eco-friendly, fully recyclable, has low environmental impact and is cost-effective.
To date, the system has been installed in the UK. The company has also set up projects for floating solar farms in countries such as India, France and Japan.
6. Transmitting solar power wirelessly from space
The Japanese Space Agency (JAXA)’s Space Solar Power Systems (SSPS) aims at transmitting energy from orbiting solar panels by 2030. On 12 March, Mitsubishi Heavy Industries Ltd (MHI) successfully conducted a ground demonstration test of “wireless power transmission”, a technology that will serve as the basis for the SSPS. In the test, 10kW of electricity was successfully transmitted via a microwave unit. Power reception was confirmed at a receiver located 500 metres away. LED lights on the receiver confirmed the transmission. This marks a new milestone in transmission distance and power load (enough to power a set of conventional kitchen appliances).
Potentially, a solar battery in orbit (36,000km above earth) could generate power that would then be transmitted to earth via microwave/laser, without relying on cables. JAXA anticipates that this new technology could become a mainstay energy source that will simultaneously solve both environmental and energy issues on earth.
The estimated lifecycle carbon dioxide emission for the operational SSPS indicates that it is almost the same as from nuclear power system and much less than fossil fuel power system, JAXA claims on its website. Countries such as India, China and Japan are investing heavily in these technologies right now.
7. Solar energy harvesting trees
Researchers at the VTT Technical Research Centre in Finland have used solar and 3D printing technologies to develop prototypes of what they have christened as “energy harvesting trees”. The tiny leaves generate and store solar energy and can be used to power small appliances and mobile devices. They flourish indoors and outdoors and can also harvest kinetic energy from wind and temperature changes in the surrounding environment.
The tree’s leaves are actually flexible organic solar cells, printed using well-established mass-production techniques. Each leaf has a separate power converter, creating a multi-converter system that makes it possible to collect energy from a variety of sources such as solar, wind and heat temperature.
The more solar panels there are in a tree, the more energy it can harvest. The tree trunk is made with 3D technology by exploiting wood-based biomaterials VTT has developed. They are mass producible and can be infinitely replicated.
8. Squeezing more out of the sun
The sun is undoubtedly the greatest sustainable energy source for earth, but the problem is the low efficiency: 80% of installed PV panels worldwide have a performance of 15% or lower; if the panels are not tracked with the sun, the average of annual tilt losses add up to minus 70%.
German architect Andre Broessel believes he has a solution.
He says his company Rawlemon can “squeeze more juice out of the sun”, even during the night hours and in low-light regions. He has created a spherical sun power generator prototype called the beta.ray. His technology will combine spherical geometry principles with a dual axis tracking system, allowing twice the yield of a conventional solar panel in a much smaller surface area.
The futuristic design is fully rotational and is suitable for inclined surfaces, walls of buildings, and anywhere with access to the sky. It can even be used as an electric car charging station.
By using a high-efficiency multi-junction cell, Broessel’s company claims to have reduced the cell surface down to 1% compared to the same power output as a conventional silicon cell in optimal conditions.
“In combination with dual axis tracking, our system generates twice the yield of a conventional panel. In addition, our smaller cell area has a lower carbon footprint because its production requires fewer precious semiconductor or other building materials,” he says on the company website.
Rawlemon has also introduced a USB spherical sun charger called beta.ey.
9. Ways to boost solar power
A group of scientists at the University of Toronto have unveiled a new type of light-sensitive nanoparticles called colloidal quantum dots, which many believe will offer a less expensive and more flexible material for solar cells. Specifically, the new materials use n-type and p-type semiconductors, but ones that can actually function outdoors. This is possible because the new colloidal quantum dots don’t bind to air (unlike traditional n-type materials that bind to oxygen)—a quality that also helps increase radiant light absorption besides offering stability outdoors. The researchers claim that panels using this new technology were found to be up to 8% more efficient at converting sunlight.
Researchers at Imperial College University in London believe they have discovered a new material—gallium arsenide—that could make solar PV systems nearly three times more efficient than existing products on the market.
The solar cells are called “triple junction cells” and they are much more efficient because they can be chemically altered in a manner that optimizes sunlight capture. The model uses a sensor-driven window blind that can track sun light along with “light-pipes” that guide the light into the system.
A company called Novatec Solar recently commissioned an energy storage solution for solar PV systems using a molten salt storage technology. The process uses inorganic salts to transfer energy generated by solar PV systems into solar thermal using heat transfer fluid rather than oils as some storage systems have. The result is that solar plants can operate at temperatures over 500 degree Celsius, which would result in a much higher power output. This means that costs to store solar power would be lowered significantly and utility companies could finally use solar power plants as base load plants rather than to meet peak demand during prime daylight hours.
In a project funded by the US department of energy, Ohio State University researchers recently announced they created a battery that is 20% more efficient and 25% cheaper than anything on the market today. The secret to the design is that the rechargeable battery is built into the solar panel itself, rather than operating as two stand-alone systems. By conjoining the two into one system, scientists said they could lower costs by 25% compared to existing products.
Scientists are exploring ways to actually line up highways and roads with solar panels, which would then be used to deploy large amounts of electricity to the grid. Called solar roadways, they have already popped up in countries such as the Netherlands and promise to save on land space.
10. Concentrated PV cells
IBM researchers have found a way to make concentrated PV cells that are more efficient in converting the sun’s energy into electricity. The researchers have shown that it is possible to increase the concentration of light on photovoltaic cells by about 10 times without causing them to melt. This, they say, makes it possible to boost the amount of usable electrical energy produced by up to five times.
The principle behind concentrated PV cells is to use a large lens to focus light onto a relatively small piece of PV semiconductor material. The benefit is that only a fraction of the semiconductor material is used, thereby reducing costs. IBM’s solution is to place an ultrathin layer of liquid metal, a compound of gallium and indium, between the two surfaces. The metal has a very high thermal conductivity and because it’s a liquid, it is possible to make this layer extremely thin, typically around 10 micrometers.
IBM is in talks with solar-cell companies about licensing the technology. Last September, Swiss-based Airlight Energy said it has partnered with IBM to bring affordable solar technology to the market by 2017.
The system can concentrate the sun’s radiation 2,000 times and convert 80% of it into useful energy to generate 12kW of electrical power and 20kW of heat on a sunny day—enough to power several average homes.
5 things you may not know about solar
1. Solar energy is the most abundant energy resource on earth--173,000 terawatts of solar energy strikes the Earth continuously. That’s more than 10,000 times the world’s total energy use.(http://1.usa.gov/SiELu2)
2. The first silicon solar cell was built by Bell Laboratories in 1954.
3. The space industry was an early adopter of solar technology, and began to use it in the 1960s to provide power aboard spacecraft. The Vanguard 1--the first artificial earth satellite powered by solar cells--remains the oldest manmade satellite in orbit, logging more than 6 billion miles.
4. As prices continue to fall, solar energy is increasingly becoming an economical energy choice for homeowners and businesses. Still, the biggest hurdle to affordable solar energy remains the soft costs like permitting, zoning, and hooking a solar system up to the power grid.
5. In California’s Mojave Desert, the largest solar energy project in the world is currently under construction. The project relies on a technology known as solar thermal energy. Once the project is complete, 350,000 mirrors will reflect light onto boilers. When the water boils, the steam turns a turbine, creating electricity. The project is expected to provide clean, renewable energy for 140,000 homes and is supported by an Energy Department loan guarantee

4 June 2016

Narendra Modi unveils biggest Afghanistan dam

Narendra Modi unveils biggest Afghanistan dam
The $290 million Salma dam in Herat will boost Afghanistan’s installed power capacity by about 10%
Prime Minister Narendra Modi on Saturday helped inaugurate Afghanistan’s biggest hydroelectric dam in a sign of warming ties between the nations.
The Salma Dam, first planned in 1976, was completed after construction resumed following decades of fighting. The $290 million dam in Herat province bordering Iran will boost Afghanistan’s installed power capacity by about 10% and provide water for an area roughly the size of New York City.
“This is a project that will irrigate lands and light up homes,” Modi tweeted following the ceremony with Afghan President Ashraf Ghani. “Inauguration of the Afghan India Friendship Dam is a historic moment of emotion & pride in the relations between Afghanistan and India.” Modi then headed for Qatar.
The project highlights India’s growing links with Afghanistan’s government, which is fighting an insurgency with Taliban militants who have found refuge in rival Pakistan. India has invested about $2 billion in Afghanistan since the Taliban regime was toppled by US forces in 2001, including the nation’s new parliament building.
‘Soft-power role’
“India is playing an important soft-power role in Afghanistan given the security and geo-politics of the region,” Omar Samad, former Afghan ambassador to Canada and France, said in an emailed statement. “The vast majority of Afghans view India as a historically friendly country with limited security-related interests.”
Ghani honoured Modi by awarding him the nation’s highest medal for India’s efforts in Afghanistan, according to an emailed statement from the Presidential Palace. The dam is the end of the “first generation” of India’s largest projects and Afghanistan hopes to soon start a “second generation of such large and sustainable projects,” Ghani said.
Situated on the upper reaches of Hari Rud River, the 107 meter (650 foot) high dam will generate 42 megawatts of power and irrigate about 80,000 hectares of land by next year, according to the fact sheet issued by the president’s office.
Project stopped
Construction on the project stopped in 1981 after the then-Soviet Union invaded Afghanistan. It restarted after the US overthrow of the Taliban led to a government that was friendly with India.
Indian engineers were transported via helicopter from Kabul once a month to visit the dam site, according to the Afghan government. All the materials and equipment for the project were transported through Iran to avoid Pakistan—India’s main political rival.
Modi and Ghani were in Iran last month to sign a three-nation agreement to develop the Chabahar port. The deal, described by Iranian President Hassan Rouhani as partly political, is designed to increase ties among Afghanistan, India and Iran.
Tensions between Afghanistan and Pakistan are rising as Taliban fighters resist peace talks aimed at ending the 15-year conflict. A US drone last month killed the Taliban’s leader while he was travelling in Pakistan.
In March, the Taliban attacked the Indian-built parliament building three months after its inauguration. The strike only caused minor damage.
Afghanistan imports much of its electricity needs from neighbouring nations such as Uzbekistan. Ghani vowed during his election campaign to lead the nation toward energy self-sufficiency. The Salma Dam is a “momentous step” toward that goal, his office said in a statement. Bloomberg

Gangotri glacier retreated by 3 km in two centuries’

Gangotri glacier retreated by 3 km in two centuries’
Scientists say dwindling snowfall affects volume of water fed to the Bhagirathi, the main source of the Ganga
After a four-hour-long trek from Bhojwasa, the final camping spot in Gangotri, when a brown, fractured pile of rocks finally came into view it was hard to believe that this was the mouth of the glacier from which the ‘holy’ Ganga emerged.
Gaumukh, the snout of the Gangotri glacier, named after its shape like the mouth of a cow, has retreated by over 3 kilometres since 1817, says glaciologist Milap Chand Sharma of Jawaharlal Nehru University.
It was nearly two centuries ago that the retreat of the glacier was first documented by John Hodgson, a Survey of India geologist.
With 10 Indian States reeling under drought and the country facing a severe water crisis after two weak monsoons, the story of retreating freshwater sources such as the Himalayan glaciers is worrying. And though a three-kilometre retreat over a period of two centuries might seem insignificant at first glance, data shows that the rate of retreat has increased sharply since 1971. The rate of retreat is 22 metres per year.
Less ice formation
The retreat points to lesser ice formation each year than its current rate of melting, a process that is continuing, say scientists at the National Institute of Hydrology, Roorkee. “Winter precipitation is when the glacier receives adequate snow and ice for maintaining itself. About 10-15 spells of winter snow as part of western disturbances feed the glacier. But last year Gangotri received very little snowfall. We have also observed more rainfall and a slight temperature rise in the region, both of which transfer heat on to the glacier, warming it,” Professor Manohar Arora, scientist at NIH explained.
In summer, the melting of the glacier feeds the Bhagirathi River, the source stream of the Ganga. A week ago, when this correspondent scaled 4,255 metres to reach the glacier, the day time temperature was about 15 degree Celsius, and the Bhagirathi was swollen with water. However, dwindling snowfall levels have also affected the volume of water discharged during summer into the river, compared to peak levels.
“Small lakes have formed on top of the glacier, as you go beyond Gaumukh towards Tapovan,” eminent conservationist, and mountaineer Harshwanti Bisht, who won the Edmund Hillary Mountain Legacy Medal in 2013, told The Hindu. “It was the blast of one such glacial lake in Chorabari that led to the June 2013 flood disaster in Kedarnath,” she said worriedly, adding, “If such fast pace of melting continued here as well, such disasters cannot be ruled out.”
Caving in
Earlier the Gangotri glacier appeared as a convex shape structure from atop Tapovan, the meadow at the base of Shivling peak beyond Gaumukh, but now the glacier appears to be caving in and is concave in shape, Ms. Bisht added.
“In 1977, when I used to go for mountaineering training, hardly two or three cars could be spotted in Gangotri. But now there are hundreds and thousands of cars and buses plying pilgrims and tourists to these places during the summer months,” Ms. Bisht said.
“The Bhoj (birch tree) forests have disappeared in the region, and though we are planting new trees now, their growth is very slow,” she said. Since 1992, Ms. Bisht has been running a tree conservation programme ‘Save Gangotri’ to help address the ecological crisis.
But the process of global warming and climate change could well be part of a normal natural cycle, Professor Milap Chand Sharma at Jawaharlal Nehru University pointed out. Reversing the process of retreat is impossible, according to him. “Stop people from visiting glaciers... you think this can happen... that too in India?” Prof. Sharma asked. “Or else, increase solid precipitation during accumulation season... Can anyone do it? Otherwise put a tarpaulin cover over the Himalayas during ablation period...” he said.
In the end, if expert opinion is believed, the climate change phenomenon of melting the glaciers could well be irreversible.

Rajasthan replaces Bihar as second-biggest contributor to IAS pool

Rajasthan replaces Bihar as second-biggest contributor to IAS pool
Women constitute a third of batch strength, fewer engineers, doctors and CAs clearing the prestigious exam
Traditional wisdom has it that most of India's civil servants are either from Uttar Pradesh or Bihar. But this perception may not hold for long with candidates like Tina Dabi of Delhi and Athar Aamir Ul Shafi Khan of Jammu and Kashmir bagging the first and the second ranks in the civil services examination (CSE) 2015.
In fact, in the CSE 2014, three out of four Indian Administrative Service (IAS) officers were from Delhi. The topper was Delhi's Ira Singhal. The person who came second belonged to Kerala. In CSE 2013, the second rank holder was from the national capital.
The CSE is held every year to fill vacancies in the IAS, Indian Foreign Service (IFS), Indian Police Service (IPS) and other Group A and Group B services. IAS is the most sought after as its officers sit at the top of the bureaucratic pyramid.
The CSE exam is held in two parts - preliminary and mains - followed by an interview. The successful candidates are allotted their batch next year, meaning those who took the CSE 2015 were allotted the 2016 batch. A record 1 million students appeared for this exam in 2015.
India's most populous state Uttar Pradesh continues to be the biggest contributor to the IAS pool with 118 successful candidates in the past five years. Tamil Nadu continued its stellar performance, producing 18 IAS officers on an average every year. Its total score between 2011 and 2015 was 90.
Rajasthan replaces Bihar as second-biggest contributor to IAS pool
The state that sprung a surprise was Rajasthan. Its contribution was 97 IAS officers, second only to Uttar Pradesh. Rajasthan is the among the bottom three states in terms of literacy and is better known for its private institutes imparting coaching to students for engineering and medical entrance exams.
Bihar and Andhra Pradesh are the other two big contributors with 68 and 61 IAS officers, respectively, in the past five years. Though there is no set pattern for Bihar, the number of IAS officers from Andhra Pradesh has halved since 2011.
Data analysed by Business Standard suggest the number of successful candidates whose domicile or hometown was Delhi saw a sharp increase in the five years beginning 2011. If Delhi contributed three officers to the IAS batch of 2011, it produced four in 2012 and seven in 2013.
In 2014 and 2015, the number went up to 16 and 19, respectively. Data was unavailable for the 2016 batch.
"More Delhi students are getting into the civil services because of an increase in awareness. The success of Delhi students in the last couple of years has also contributed to more students taking up the CSE," says AK Mishra, managing director of Chanakya IAS Academy, which provides coaching for these exams.
Mishra says his institute has registered a 20 per cent increase in students and it is coaching 10 batches of 100 students each in the national capital.
Delhi's success assumes significance because of its small population relative to states like Madhya Pradesh, Karnataka and West Bengal. If Delhi produced 49 IAS officers in the past five years, the contributions from Madhya Pradesh, Karnataka and West Bengal were 17, 37 and 7, respectively. Maharashtra, Kerala and Haryana contributed 58, 54, and 51 officers, respectively, in the past five years.
The CSE results depict two new trends. First, the number of women qualifying is increasing each year and they now constitute one-third of the total batch strength. Second, there is a decline in the number of engineering and medical graduates clearing the exams.
Of the 180 IAS officers in the 2015 batch, 159 were graduates and 15 held engineering degrees. Four were post graduates. This is in contrast with the 2011 batch, when of the 148 IAS officers, only 45 were graduates. The rest were engineers (43), post graduates (44) and professionals (16), mainly doctors and a few chartered accountants.

review the Fiscal Responsibility and Budget Management (FRBM) Act?


What could be the options before the five-member committee that has been set up to review the Fiscal Responsibility and Budget Management (FRBM) Act?

The committee, headed by former revenue secretary N K Singh, held its first meeting last Saturday and is expected to propose an alternative fiscal framework as suggested by Finance Minister Arun Jaitley in his last Budget.

Why a review?

From the fiscal perspective, the arguments in favour of transitioning to a new, rule-based, fiscal framework can be made at many levels.

First, the governments of all hues would prefer to pivot away from the fiscal conservatism towards profligacy as it pays rich dividends politically. But, such policy leads to wasteful expenditure at both at the central as well as state level.

Second, higher fiscal deficits tend to crowd out the private sector. For instance, in the current macroeconomic situation, the combined fiscal deficit of the Centre and states is pegged at six per cent of gross domestic product or GDP (for Centre, fiscal deficit is budgeted at 3.5 per cent of GDP while for a state it is projected at around three per cent). Add to this, borrowing of the public sector enterprises and bodies like the National Highways Authority of India (NHAI) and with the household sector's financial savings dipping down to around 7.5 per cent of GDP, the space for private sector borrowing is severely constrained.

Third, higher fiscal deficits also tend to be inflationary.

Alternative frameworks

It was in the backdrop of this context the finance minister took the decision to review the FRBM Act. And though the committee has just begun to deliberate, it has time till the end of October to put forth a road map. Analysts have proposed various alternative frameworks.

One such proposal is to transition to a cyclically adjusted fiscal deficit framework. Under this arrangement, government spending would increase during economic downturns to shore up aggregate demand, only to recede when private spending strengths. The policy stance would thus be counter cyclical- increase government spending during times of distress as opposed to a pro-cyclical policy and increase government spending when the going is good.

There is some merit in this argument. While theoretically moving to such a framework makes sense, in practice it's difficult to implement. Part of the problem is that of measurement. This framework relies on measuring the economy's potential GDP and also requires clarity about the nature of business cycles. But, here lies the problem. There does not exist any reliable estimate of India's potential GDP.

The most recent study that estimates potential GDP was carried out by Barendra Kumar Bhoi and Harendra Kumar Behera, who work at the Monetary Policy Department of RBI. They have estimated India's potential GDP to be close to seven per cent (6.8 per cent to be precise) during 2009-15.

But the problem with this estimate, as the authors themselves acknowledge, is that "considerable uncertainty attached to these estimates, mainly related to the methodology, underlying data and judgments about different parameters." Thus the authors provide an indicative range of 6.3- 7.3 per cent. Such a big range is unlikely to inspire confidence, especially when doubts over the new GDP series continue to linger.

Echoing these concerns, Rathin Roy, director, the National Institute of Public Finance and Policy (NIPFP), says, "We simply do not have robust modelling of either the Indian business cycle or the output gap on which any credible policy analytics can be based." Roy is a member of the committee which has been tasked with the review of the FRBM act.

Some have also floated the idea that rather than a fixed fiscal deficit target, a range or a band is more preferable. The governments are likely to prefer a higher fiscal deficit.

Simply ascribing a range may not work as the government of the day may choose the higher end of the range. This would undercut the governments efforts to rein in wasteful expenditure.

Economists like Pinaki Chakraborty, Professor at NIPFP, therefore, propose to "link the range for fiscal deficit to a number of indicators such as the governments debt level, its interest service obligations and its revenue deficit which gauge the fiscal health of the government."

"If the governments are able to reduce or eliminate their revenue deficit then they should get the flexibility for a higher fiscal deficit," he says.

One possible alternative is to link government spending to bank credit, data on which is both reliable and available timely. The logic for choosing this indicator is pretty straightforward. Sluggish bank credit signals low private sector demand and could be construed as a sign that greater government spending is needed to boost aggregate demand.

But the problem with this framework is "it ignores supply side issues" says M Govinda Rao, member of the 14th Finance Commission and former director of NIPFP. Bank credit could be sluggish due to a variety of reasons. "It depends on many other factors too like global economic environment, the governments borrowings, among others" says Chakraborty.

Another indicator that could be used is electricity consumption by the manufacturing sector. But in the absence of reliable data, this option is also off the table.

While the committee will grapple with these issues in the coming months, what indicators are finally used is a matter of inclination. "At the end of the day it's a question of judgment. A thumb rule have to be applied," says Rao.


THE PANEL
  • Panel to review the fiscal framework is headed by former secretary N K Singh
     
  • Its members are former finance secretary Sumit Bose, Chief Economic Advisor Arvind Subramanian, RBI Deputy Governor Urjit Patel and NIPFP Director Rathin Roy
     
  • The existing FRBM Act prescribes a target fiscal deficit of 3% of GDP
     
  • The Fourteenth Finance Commission (chaired by Y V Reddy) recommended a 3% fiscal deficit for the centre and another 3% for the states

1 June 2016

GST’s Rajya Sabha impasse

Italy is Europe’s fourth most populous country, and in terms of gross domestic product (GDP), the eighth largest in the world, only slightly behind India. It has been a parliamentary democracy since World War II. But not even once did it elect a government that could last a full term of five years. It has had 63 different governments so far. One source of this instability is the nature of its bicameral legislature. The upper and lower Houses have 315 and 630 members, respectively, elected by proportional voting. Hence, smaller parties (with more than a threshold of 3% of the vote) can hold great sway. A party with less than 10% of seats can even form the government, typically with a coalition. Passing legislation requires it to pass the simple majority test in both Houses. On many occasions, legislation has stumbled because it was blocked by the upper House. In that sense, the upper House has equal power and a very unusual veto. This dysfunctional feature has led to instability, revolving-door governments and frequent charges of horse-trading. To change this, Italy needs to reform its constitution, and curtail the power of its upper House. Indeed, this reform has been the top priority of Matteo Renzi, who at age 39 became Italy’s youngest prime minister two years ago. After a lot of jockeying, this reform bill was finally passed in Parliament in April, despite huge opposition. One opposition party tried desperately to derail the passage, by proposing 82 million amendments to the draft bill! These were computer generated multiple versions by changing small stuff like a comma or full stop. The rules required that each version had to be printed and put on record. Obviously, some people can go to ridiculous lengths to stop reform. Luckily for Italy, this reform has passed at long last, and a referendum in October will lead to the constitutional overhaul. This portends more stable governments in the future.
The problem of the upper House of bicameral legislatures holding up crucial reform is also being experienced in Canada and Australia, albeit less severely than Italy. The origin of this problem can be traced to a mini-crisis in 1911 in UK Parliament, when the budget passed by the House of Commons was rejected by the House of Lords. It led subsequently to the Parliament Act of 1911 and 1949, establishing the formal dominance of the lower House, and also the Salisbury Doctrine, that the upper House would not by convention, oppose bills on second or third reading, having once passed by the lower House. One consequence of this is that ‘money bills’ are required to be passed only in the lower House, a feature codified in India’s Constitution.
India’s upper House is council of states whose members are elected indirectly by state legislatures. (By contrast in the US, the upper House, i.e. the Senate members, are directly elected). The Rajya Sabha represents the states. Its role is also that of providing checks and balances in lawmaking, to provide reason and deliberation, and to function beyond considerations of party politics. If a legislation that originates from the Lok Sabha is driven by popular will and brute majority, then Rajya Sabha can subject it to the broader test of rationality, practicality, relevance and reasonableness. That’s because the Rajya Sabha is more immune to electoral interests. But sometimes its deliberations can also slow down legislation or eventually kill it (see for instance, The Deliberative Indian ). In rare instances, the Rajya Sabha’s delay and intransigence can become counter-productive.
One such rare instance may be the present case of the goods and services tax (GST) bill. The GST journey is already 16 years old. This span covers two stints each of both Congress and Bharatiya Janata Party-led governments, with each having promised to roll it out during their respective terms. One can safely assume that there is strong bipartisan support. It will be the most important indirect tax reform since independence. It is a huge deal, because it entails all 29 states and seven Union territories voluntarily giving up their constitutional right to impose sales tax (and sundry other taxes) in exchange for a uniform countrywide system. It’s a grand bargain. It will create a borderless common and integrated economic market within India, and is expected to permanently add to GDP growth significantly. The roll-out of GST requires a constitutional amendment, and hence passage in both Houses. It has cleared the lower House. But now, it is stuck in the Rajya Sabha where it needs 164 votes. The GST is not a ‘money bill’, hence needs assent of both Houses. Passing the GST bill is also fulfilment of a promise made in the manifestos of both the national parties. Of the three technical objections raised in the Rajya Sabha, two have been sorted out. These relate to eliminating the 1% additional tax, and evolving an autonomous dispute resolution scheme. The only sticking point is whether to put an upper numerical limit in the law on the applicable tax rate. This can surely be incorporated in the rules that will be framed or in some appropriate manner. The Rajya Sabha should now develop an informal convention (a laSalisbury) that a policy which has been thoroughly discussed, has broad and bipartisan support, and has passed with a majority in the lower House, should not be held up. As far as the GST bill is concerned, members of the Rajya Sabha should not be constrained by their party whip. While we don’t quite need an Italian surgery, we can surely avoid an unnecessary impasse.

uppcs exam 2016 updates

uppcs exam 2016 updates
mains exam :expected in september (3rd week) ,2016 (earlier it was scheduled on 24th june.
cutoff for general :141 marks (106 questions)
RO/ARO -2016 will be held in 2016 itself.

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