Latest news with #KannanK
Indian Express
6 days ago
- Business
- Indian Express
How RBI helps maintain the resilience of Indian economy
— Kannan K The Reserve Bank of India's (RBI) financial inclusion index, which captures the extent of financial inclusion across the country, improved to 67 in March 2025 compared to 64.2 in the corresponding period the previous year. The central bank has said that growth was witnessed across all sub-indices – access, usage, and quality – in FY25. Recently, in its half-yearly Financial Stability Report (FSR), the RBI also noted that the Indian economy remains a key driver of global growth, underpinned by sound macroeconomic fundamentals and prudent macroeconomic policies. At the same time, it has proposed the creation of a Financial Conditions Index (FCI), which would enable real-time monitoring of the country's financial health. As the central bank, the RBI plays a vital role in regulating the country's economy and promoting financial literacy. Let's explore its formation, evolution, core responsibilities, and contemporary issues. The RBI was established on April 1, 1935 via the Reserve Bank of India Act, 1934 based on the recommendations of the Hilton Young Commission. The bank was constituted with primary objectives of regulating the issue of currency, maintaining reserves, and operating the credit and currency system of the country. As a colonial institution owned by private shareholders, the RBI was nationalised in 1949, and its objectives were realigned with India's developmental goals. Following economic liberalisation of the 1990s, the RBI's role evolved further and became more facilitative in nature. There was noted a shift from direct control of foreign exchange rates and credit to a broader focus on monetary policy and systemic regulation. The RBI is governed by a Central Board of Directors appointed by the Government of India. The board comprises official directors (the Governor and up to four Deputy Governors) and non-official directors, including nominees from various fields, government officials, and representatives from the four local boards. All members are appointed for a period of four years. The RBI operates through 30 specialised departments, such as the Department of Currency Management and the Department of Banking Regulation, and maintains its presence across the nation through its central office and 33 regional offices. In a key reform in 2016, the Monetary Policy Committee (MPC) – a six-member statutory body – was established to control the level of inflation in the economy. In doing so, it uses tools such as repo rate – the rate at which the RBI lends money to banks. Headed by the Governor of the RBI, the MPC is mandated to meet at least four times a year. The body takes decisions on the basis of majority vote. Last month, the MPC announced a significant cut in repo rate by 50 basis points (0.5 per cent) to 5.5 per cent and reduced the Cash Reserve Ratio (CRR) by 100 basis points to boost growth prospects. The RBI acts as banker to both the Government of India and state governments, managing their banking accounts and debt. It is also the banker of all scheduled banks, and manages their accounts as well as facilitates inter-bank transactions. In addition, the central bank acts as a 'lender of last resort' for commercial banks, meaning it provides financial support to commercial banks that are facing severe liquidity issues, and prevents systemic crises. It has an important developmental role through the promotion of financial inclusion and awareness, and ensuring credit flow to various sectors via priority sector lending requirements. In essence, the RBI steers the Indian economy, effectively balancing both stability and growth. It makes use of a range of tools to achieve the goals of its monetary policy. The most important among them are: — Repo Rate: The rate at which the RBI lends money to commercial banks. It is a benchmark rate, meaning it acts as a reference point for commercial banks to set the interest rates. A lower repo rate makes borrowing cheaper and encourages economic activity, while a higher repo rate discourages banks from lending and controls inflation. Fixing the repo rate is the core responsibility of the MPC. — Reverse Repo Rate: The interest rate the central bank pays commercial banks when they park their excess cash is called the reverse repo rate. — Cash Reserve Ratio (CRR): The percentage of a bank's total deposits that it is required to maintain in liquid cash with the RBI. The RBI determines the CRR percentage from time to time. — Statutory Liquidity Ratio (SLR): Percentage of a bank's deposits that it is required to maintain in the form of liquid assets like cash, gold, or approved securities. — Marginal Standing Facility (MSF) Rate: The rate at which banks can borrow money from the RBI on an overnight basis in an emergency situation due to the lack of interbank liquidity. — Open Market Operations (OMOs): The RBI buys and sells government securities in the open market for the injection or absorption of durable liquidity in the banking system. An increase in the repo rate, SLR, CRR, and MSF reduces the money supply in the economy, helping in inflation control but slowing down growth. On the other hand, reducing these rates injects liquidity into the economy, stimulating growth but potentially causing inflation. Calibrating these monetary tools to strike the right balance between price stability and sustainable growth is one of the core responsibilities of the RBI. Moreover, there are challenges faced by the country's central bank, notable among them are the digitalization of the economy, the emergence of new financial technologies (fintech), and the growing threat of cyberattacks. The pace of innovations in the financial sector, such as in areas like digital payments, requires the central bank to swiftly build and deploy advanced supervision and regulation technology (RegTech and SupTech). In addition, maintaining the resilience of the Indian economy to withstand shocks, both global and domestic, remains one of the key responsibilities of the RBI. Notably, the RBI is actively developing regulatory frameworks for emerging technologies to enhance supervisory oversight for managing cyber and even climate-related financial risks, and strengthen capital and liquidity requirements for reinforcing overall financial sector resilience. It has also introduced initiatives like the digital rupee as a Central Bank Digital Currency (CBDC) to keep pace with evolving financial trends. This proactive approach ensures the central bank remains at the forefront of safeguarding India's economic stability. (Kannan K is a Doctoral candidate at the Centre for Economic and Social Studies, Hyderabad) Share your thoughts and ideas on UPSC Special articles with Subscribe to our UPSC newsletter and stay updated with the news cues from the past week. Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X.
Indian Express
09-07-2025
- Business
- Indian Express
How India's biofuel potential complements its leadership in sustainable aviation fuel
— Kannan K Global Energy Independence Day, observed on July 10, serves as a timely reminder to embrace cleaner, sustainable energy alternatives. In this context, aviation has emerged as a critical sector as it is estimated to contribute nearly 2.5 per cent of global annual carbon dioxide (CO₂) emissions, alongside almost 4 per cent of the total anthropogenic contribution to global warming, Therefore, focus has been shifted to solutions like sustainable aviation fuel (SAF), which is likely to account for over 60 per cent in decarbonisation. India can potentially manufacture 40 million tonnes of SAF by 2050, which positions it as a key player in shaping a greener, more resilient aviation future. Let's understand SAF and its key environmental benefits. Aircraft emit water vapour, soot, sulfur aerosols, nitrogen oxides (NOₓ), which contribute to the formation of contrails – clouds that form when water vapour condenses and freezes around small particles (aerosols) in aircraft exhaust. All of these factors have additional warming effects on the atmosphere. Moreover, aviation's share in global emissions is expected to increase due to two key reasons. Currently, less than 10 per cent of the global population relies on air travel. But this number is projected to more than double in the coming decades. Second, unlike aviation, other high-emission sectors such as electricity, cement, and steel production are gradually moving to greener alternatives. In this context, Sustainable Aviation Fuel (SAF), also known as aviation biofuel, has emerged as a credible alternative with the potential to reduce aviation-related emissions. SAF is made from sustainable sources and has characteristics similar to Aviation Turbine Fuel (ATF), but with a significantly lesser carbon footprint. It is a 'drop in' fuel, meaning it can be blended with ATF without requiring any change in the existing machinery of aircraft. SAF can be derived from a range of materials, including — Oils and fats such as Used Cooking Oil (UCO), oil-rich seeds from plants, algae oils, animal fats — Municipal Solid Waste (MSW) — Agricultural and forestry residues such as wood waste, sugarcane bagasse, corn stover, husks and straw, sugars and starches. There are various methods to produce SAF, with each using different combinations of raw materials. For SAF to be truly sustainable, it is important that the feedstock used in its production does not compete with food production, cause deforestation, or harm biodiversity. SAF offers multiple benefits. The primary advantage is its ability to significantly reduce emissions and its compatibility with the current global aircraft fleet. It means SAF can be used without modifications to existing planes, engines, or fueling infrastructure. It is estimated that SAF has the potential to reduce GHG emissions in air travel by up to 80 per cent compared to conventional jet fuel. In addition to SAF, there are other innovations like Renewable Fuels of Non-Biological Origins (RFNBOs). It is produced using renewable electricity through Power to Liquid PtL technology that combines Green Hydrogen with Carbon captured from atmospheric CO₂. It offers the potential for even net negative emissions. SAF combustion produces far less harmful gases and particulate matter, contributing to cleaner skies. The adoption of these biofuels can lead to new demand for feedstock and open new revenue streams in agriculture and waste management. In addition, diversification of fuel sources in the aviation sector can help reduce import dependence and protect the sector from global oil price volatility. This, in turn, could lead to a more stable aviation sector, possibly making air travel accessible to larger sections of society. Moreover, SAF adoption will also generate employment opportunities in the sustainability sector. However, despite these benefits, there are a few barriers to the widespread adoption of SAF. First, the cost of producing these biofuels, which is more than double that of conventional fuels, makes its large-scale adoption difficult for airlines without passing the burden onto consumers. The production, storage, blending, and transportation of SAF require the development of new infrastructure, which would add significantly to the initial cost of adoption. Another key issue is the availability and sustainability of feedstock required for SAF production. The characteristics and variety of necessary feedstock mean that there is no guarantee of year-round supply. Further, there is a significant risk that the production process can have adverse environmental impacts if not managed properly. For SAF to be considered truly sustainable and to ensure a significant reduction in GHG emissions, it is crucial to ensure that its production does not have negative social or environmental impacts. Notably, there is now a global push to increase the blending of SAF in commercial aviation. The International Civil Aviation Organisation (ICAO) – the UN's specialised agency for the development of air transport – has established the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). It mandates that international airlines must offset their emissions growth post-2020, and the use of SAF is incentivised as a compliance mechanism. Similarly, the European Union's ReFuelEU Aviation initiative has introduced binding SAF blending targets, aiming for 2 per cent SAF by 2025, 6 per cent by 2030, and 70 per cent by 2050, with sub-mandates for synthetic fuels. Another innovative mechanism is the World Economic Forum's Clean Skies for Tomorrow initiative, which has set the blending target of 10 per cent SAF by 2030. It also seeks to address the high cost of SAF through innovative financing and supportive policy frameworks. However, India has a nuanced and pragmatic approach to SAF, advocating for nationally determined targets rather than binding international mandates. India's position is based on the twin goals of prioritising energy security and food security, and seeking to balance sustainability goals with passenger demand. Despite these reservations, India is a party to the CORSIA and is positioning itself to be a key player in the global SAF landscape. Notably, the Global Biofuels Alliance (GBA) was launched by India during the G20 Summit in New Delhi in 2023 with the aim to expedite the worldwide adoption of biofuels, including SAF. India has also set SAF blending targets of 1 per cent for domestic airlines by 2025 and 1-2 per cent for international flights by 2027-2028, and 5 per cent by 2030 and the potential to scale up to 15 per cent by 2040. The abundant supply of agricultural residues bolsters India's goal of becoming SAF exporter. However, challenges like high costs and underdeveloped supply chains need to be taken care of. To address such issues, policies like tax incentives and public-private partnerships have been proposed. SAF presents a near-term, drop-in solution to reduce emissions from the aviation sector while longer term decarbonisation technologies continue to evolve. Despite existing challenges, the international consensus to push for SAF through initiatives like the CORSIA and ReFuelEU offers hope for overcoming barriers to large-scale adoption. For India, SAF provides an opportunity to leverage its resources to be a market leader in the sector and make meaningful contributions to global decarbonisation efforts, while also keeping local realities and national priorities in mind. What is Sustainable Aviation Fuel (SAF), and how does it differ from conventional aviation fuel? What are the key environmental benefits of adopting SAF in the aviation sector? Why is SAF referred to as a 'drop-in' fuel? What are the primary feedstocks used in SAF production? How can India leverage its agricultural and waste resources to become a global exporter of SAF? How has India positioned itself in the global SAF landscape, and what are its national blending targets? What are the major global initiatives for promoting SAF adoption? (Kannan K is a Doctoral candidate at the Centre for Economic and Social Studies, Hyderabad) Share your thoughts and ideas on UPSC Special articles with Subscribe to our UPSC newsletter and stay updated with the news cues from the past week. Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X.
Indian Express
02-06-2025
- Business
- Indian Express
SC pulls up ED: What are the powers of India's financial crime watchdog?
— Kannan K The Supreme Court recently reprimanded the Enforcement Directorate (ED) for 'crossing all limits' and 'violating the federal structure' by conducting raids on government-run liquor retailer Tamil Nadu State Marketing Corporation (TASMAC). Chief Justice of India (CJI) B R Gavai described the central agency's actions against the State corporation as a violation of the Constitution's federal structure. Notably, the TASMAC case is not the first time the apex court has pulled up the ED. Earlier this month, the Court criticised the body for making 'allegations without any reference to anything' in a liquor scam case in Chhattisgarh. In another case in Chhattisgarh, it had called out the agency for paying scant heed to the 'fundamental rights of the accused'. These developments warrant revisiting the formation and evolution of India's economic intelligence agency, and its role in enforcing economic laws and combating financial crimes. The ED was established on May 1, 1956, as the 'Enforcement Unit' under the Department of Economic Affairs within the Ministry of Finance for handling violations of exchange control laws under the now-repealed Foreign Exchange Regulation Act, 1947/1973 (FERA). Later on, it was renamed the Enforcement Directorate and was transferred to the administrative control of the Department of Revenue, and subsequently entrusted with the enforcement of a broader range of financial laws. The enactment of the Foreign Exchange Management Act (FEMA), which replaced FERA in 1999, and the Prevention of Money Laundering Act (PMLA) in the early 2000s, increased the power of ED. These moves aligned its functions with international standards to combat financial crimes, notably those recommended by the Financial Action Task Force (FATF). In 2006, India received observer status in FATF – which was created in 1989 to coordinate anti-money laundering efforts across the world – and in 2010, it became its member state. While the ED has a broad mandate to investigate offences related to money laundering and foreign exchange violations, it's mandated to enforce the following key laws: — The Prevention of Money Laundering Act, 2002 (PMLA): The ED traces assets from money laundering activities and is responsible for ensuring the prosecution of offenders and confiscation (permanent seizure of ownership, usually after conviction) of such assets. — The Foreign Exchange Management Act, 1999 (FEMA): The law enforcement agency is also responsible for imposing penalties on offenders of FEMA and in the cases pertaining to violations committed prior to the repeal of the FERA of 1973, which FEMA replaced, thus being responsible for the handling of legacy FERA cases. — The Fugitive Economic Offenders Act, 2018 (FEOA): The ED is mandated to attach (temporarily seizing of property without assuming ownership to prevent sale, usually during trial phase) and confiscate properties of economic offenders evading Indian law by fleeing abroad — The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA), 1974: The Directorate is the sponsor of cases under the law and can initiate preventive detention proceedings on FEMA violations based on COFEPOSA. ED's power and federal structure Thus, as the primary body to enforce economic laws, the ED enjoys significant powers to investigate, detect, and prevent economic crimes. For instance, under the PMLA, the central agency is empowered to summon individuals, enforce their attendance, and record their statements, which are valid as evidence. The ED also has the authority to conduct searches and seize property or documents linked to money laundering, provided there's a recorded 'reason to believe' and the statutory prerequisites are met. It can also make arrests based on material evidence and written justification – but with the condition that the grounds for arrest are communicated to the accused. This is a higher threshold than that required for arrests under the Bharatiya Nagarik Suraksha Sanhita (BNSS). The ED also has the power to attach properties suspected to be proceeds of crimes for up to 180 days to prevent their sale during investigation. A distinctive feature of PMLA is the reversal of the burden of proof, where the onus often shifts to the accused to prove innocence by showing the legitimacy of the attached assets. Under the FEMA, the ED has adjudication powers and acts as a quasi-judicial body to impose penalties for foreign exchange regulation violations. Further, the FEOA grants the ED powers to attach and confiscate properties of economic offenders who have absconded from India. Taken together, these wide range of powers to investigate, secure evidence, attach and confiscate assets strengthen the ED's objective of protecting the integrity of India's financial system. However, these powers are subject to constitutional limits rooted in federalism. The Supreme Court has repeatedly warned the ED on overreaching its jurisdiction, stressing the need to respect state autonomy and to avoid causing any disruption to the union-state balance. These instructions are relevant, particularly in light of allegations regarding the use of the ED as a tool to interfere in investigations that fall under state jurisdiction. While the ED has an important role in safeguarding India's financial integrity, its functioning has regularly drawn scrutiny and raised significant concerns, as seen in the Supreme Court's recent criticism of the TASMAC case. The CJI's observation regarding a violation of the Constitution's federal structure coupled with concerns about the agency's operational independence and allegations of partisan motivations underlined the need for introspection. A significant criticism faced by the ED is regarding its low conviction rate under the PMLA, despite a substantial number of cases registered and properties. Of the 5,297 cases registered under the PMLA from 2014 to 2024, only 40 cases have seen convictions, prompting the apex court to direct the agency to 'focus on quality prosecution and evidence' in August 2024. This has raised questions about the intent and effectiveness of the ED's investigative and prosecution mechanisms in securing convictions. The extensive powers granted to the ED, particularly under PMLA, including the power to arrest, provisionally attach assets, and the unique provision of a reversed burden of proof, have led to debates regarding their potential impact on due process and civil liberties. It has been alleged that the provision placing the burden of proof on the accused to prove their innocence has been used as a political tool to stifle the opposition. The Supreme Court's observations regarding a pattern of accusations without proof, and dismissal of multiple cases due to lack of evidence, substantiate such concerns. Critics argue that such powers are likely to be misused for political gain. The recent arrest of a high-ranking ED official by the CBI on grounds of taking bribes apparently contributed to eroding public trust in the body. Concerns have also been raised regarding the operational independence of the ED. Allegations of political influence and targeting of specific individuals or entities have frequently surfaced, impacting public perception and the agency's credibility. The need for greater transparency in its case selection process, investigations, and conviction rates is widely discussed. Additionally, the ED's actions sometimes overstep its jurisdictions, taking up cases that fall under the states' ambit, as seen in the TASMAC case, leading to federal friction. The ED would benefit from certain reforms aimed at increasing its effectiveness and improving the public perception regarding its functioning. A key step perhaps could be to place the agency under stronger judicial oversight, particularly the investigation, arrest, and attachment processes to prevent overstepping of jurisdiction. Another step could involve strict adherence to due process to counter allegations of political interests and harassment, which could be supported by establishing clear Standard Operating Procedures (SOPs) and effective training and capacity-building for ED personnel. Reorienting the ED's functioning to make investigations intelligence-driven and focussing on convictions through strong evidence might further help to dispel the perception of bias. To conclude, an economic intelligence agency such as the ED is a necessity to protect the economic integrity of India, ensuring the prevention of financial crimes. Reforms that keep pace with the times and strict adherence to due process and constitutional norms will be essential to ensure its fair and effective functioning. How has the ED's mandate evolved over time since its inception in 1956? What are the key laws enforced by the Enforcement Directorate, and how do they define its jurisdiction? How does the ED's role intersect with federal principles enshrined in the Indian Constitution? The Supreme Court criticised the Enforcement Directorate (ED) for 'crossing all limits' and 'violating the federal structure' in the Tamil Nadu State Marketing Corporation (TASMAC) case. Evaluate the concerns raised by the Court. Do you think the political misuse of agencies like the ED impact democratic institutions and public trust in governance? What is the significance of the ED's powers to attach and confiscate property under different laws like PMLA, FEMA, and FEOA? (Kannan K is a doctoral candidate in Political Science at the Centre for Economic and Social Studies, Hyderabad.)
Indian Express
26-05-2025
- Business
- Indian Express
How e-governance advances India's Viksit Bharat goal
— Kannan K As India remains committed to achieving the goal of Viksit Bharat by 2047, efforts to strengthen governance through collaborative federalism and technological integration have acquired greater momentum. During the NDA Chief Ministers' conclave, chaired by Prime Minister Narendra Modi, the commitment to effective governance and best practices was reiterated. In this pursuit, e-governance has emerged as an effective tool as it helps promote transparency, efficiency, and citizen-centric service delivery through digital tools. E-governance, or electronic governance, refers to using digital technologies such as the internet and other Information and Communication Technology (ICT) tools by governments to deliver public services, provide information and communication, conduct transactions, and promote active citizen participation in governance. The most important goal of e-governance is to improve transparency, accountability, and responsiveness. The ultimate aim of e-governance is to bridge the gap between the state and society by creating an effective, participatory and inclusive system of administration. This goal is operationalised through different features of e-governance such as the creation of single-window access to services, simplified communication and coordination between different departments, real-time information dissemination, and platforms for citizen feedback and grievance redressal. These features create a seamless, efficient, and user-friendly governance ecosystem. Premised on the idea of SMART governance (Simple, Moral, Accountable, Responsive, and Transparent), the success of e-governance rests on four fundamental pillars: people, process, technology, and resources. People are both the beneficiaries of and the driving force behind e-governance initiatives. The digital literacy, adaptability, and willingness of the public to make use of new digital platforms have a direct impact on the reach and impact of all e-governance systems. The process component refers to the re-engineering and redesigning of government procedures to make them more efficient, transparent, and citizen-centric. Technology serves as the backbone of all e-governance mechanisms, providing all the infrastructure and tools necessary for a digital transformation of administrative functions. Resources refer to both financial capital and human expertise and intelligence, both of which are essential for the implementation and sustainability of e-governance projects. Notably, the scope of e-governance extends beyond mere service delivery. It enables direct communication of the government with various entities through multiple channels of interaction such as: — The Government-to-Citizen (G2C) approach enables direct communication with the public via services such as online bill payments, certificate and permit applications, etc. — The Government-to-Business (G2B) link facilitates interactions and transactions between the government and businesses, simplifying processes such as licensing, permits, and other agreements. — The Government-to-Government (G2G) is the exchange of information, data and other communications between different arms of the government. G2G communication has significantly improved interdepartmental efficiency and addressed the delays in initiatives that require approvals from multiple government bodies. — The Government-to-Employee (G2E) interaction pathway uses technology to manage services and communications for government employees such as salaries, HR management such as transfers, promotions and granting of leave, facilitating training, etc. Thus, the advent of electronic governance, and the pathways it has created, has transformed the way governments interact with their citizens and with the various branches of the administration. This transformation, however, has evolved over decades, marked by key institutional and technological developments. Although the concept of e-governance and its potential to transform the interaction between the state and citizens emerged later, India's journey towards e-governance can be traced back to the computerisation of government offices in the 1970s. The establishment of the National Informatics Centre (NIC) in 1976 laid the foundation for the integration of ICT into public administration. During the 1980s and 1990s, India witnessed steady progress in the automation of government processes and the networking of administrative offices. A major turning point came with the launch of the National e-Governance Plan (NeGP) in 2006. The plan aimed to make government services more accessible to the public through 27 Mission Mode Projects (MMPs), which covered a wide range of government functions. An important and successful component of NeGP was the establishment of Common Service Centers (CSCs), which helped enhance public access to these services. In 2015, e-Kranti, or NeGP 2.0, was initiated, which provided another framework for further digitisation with a focus on initiatives such as Digital India, Mobile First, and Cloud First. The Digital India Mission in particular has played a key role in enhancing digital infrastructure for governance and empowerment. Several flagship initiatives under this mission have shaped the e-governance scenario in India. Aadhaar, the world's largest biometric identification system, has streamlined the welfare delivery process and reduced leakages. The UMANG (Unified Mobile Application for New-age Governance) platform offers single-window for accessing a range of government services. The BharatNet initiative, which aims to connect all Gram Panchayats with high-speed broadband, is expected to considerably bridge the rural-urban digital divide following its full implementation. The Government e-Marketplace (GeM) has brought transparency to public procurement, while initiatives like e-Courts, and e-Office have increased efficiency and accountability in various domains. Various state governments have also implemented e-governance initiatives at the local level. These initiatives have demonstrated the transformative potential of e-governance – though not without certain challenges. The establishment of an e-governance system has brought about a number of benefits. Digital platforms have considerably reduced arbitrary actions from officials, making government functioning more open and transparent. It has enabled citizens to obtain key services such as licenses, certificates, and subsidies without physically visiting government offices, saving time and resources. The Direct Benefit Transfer (DBT) mechanism has ensured that subsidies and other payments from the governments reach intended beneficiaries, avoiding leakages and promoting financial inclusion. Moreover, e-governance has given the marginalised sections of society – including women, oppressed communities, and the rural population – new avenues for participating and benefitting from government programmes and thereby contributing to empowerment through digital inclusion. Despite its several benefits, e-governance faces some important challenges. The State of India's Digital Economy (SIDE) Report 2025, published by the Indian Council for Research on International Economic Relations (ICRIER), indicates that while India is the third largest digitalised economy in the world, it ranks only 28th in terms of per capita digitalisation. This highlights the persistence of a large digital divide, particularly in rural areas where the lack of access to digital infrastructure limits the reach and positive impacts of e-governance. In addition, the digitalisation of sensitive data raises concerns regarding cybersecurity, privacy and data protection. Low levels of digital literacy among both citizens and government personnel are another factor that limits the effective use of e-governance platforms. Most platforms operating primarily in English and Hindi cause non-Hindi/English speakers to have limited access. Further, resistance to change within the bureaucracy, along with technical issues such as limited power supply and poor connectivity, also affect the optimal implementation of e-governance across the country. To attain the full potential of e-governance, a multipronged approach seems to be essential. Initiatives to bridge the digital divide through last-mile connectivity and ensuring affordable access to the internet and digital devices are the need of the hour. Raising digital literacy through targeted training programmes for both citizens and officials would help advance the process of e-governance. Initiatives such as BHASHINI and the development of multilingual platforms would be important steps to increasing digital literacy and overcoming linguistic barriers. Moreover, the establishment of avenues for citizen feedback can further help democratise the governance process and make it more inclusive. There is also a need for regular capacity building and policy reforms that keep pace with technological advancements to ensure a sustainable e-governance ecosystem. To sum up, India's drive towards e-governance is proof of its commitment to a transparent, accountable and citizen-centric governance system. As the nation moves towards the goal of Viksit Bharat by 2047, e-governance will remain a key pillar in shaping the future of Indian governance. What is e-governance? Describe its four pillars of e-governance evaluating how they interact to make governance more efficient. E-governance has the potential to bridge the gap between the state and society. Evaluate in the context of rural-urban digital divides. How far has e-governance addressed the issue of corruption and inefficiency in Indian public administration? Explain with examples. Evaluate the role of initiatives like Digital India, UMANG, and BharatNet in enhancing the reach and effectiveness of e-governance. How does the emphasis on governance and best practices during recent meetings such as NDA conclaves reflect the growing importance of e-governance in India's development model? (Kannan K is a doctoral candidate in Political Science at the Centre for Economic and Social Studies, Hyderabad.) Share your thoughts and ideas on UPSC Special articles with Subscribe to our UPSC newsletter and stay updated with the news cues from the past week. Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X.
Indian Express
12-05-2025
- Science
- Indian Express
Hydrogen fuel cell vehicles for greener tomorrow
— Kannan K (The Indian Express has launched a new series of articles for UPSC aspirants written by seasoned writers and scholars on issues and concepts spanning History, Polity, International Relations, Art, Culture and Heritage, Environment, Geography, Science and Technology, and so on. Read and reflect with subject experts and boost your chance of cracking the much-coveted UPSC CSE. In the following article, Kannan K explains how hydrogen fuel cells compliment India's transition to green mobility.) As India accelerates its transition to sustainable transportation, major players across sectors are embracing green hydrogen mobility. Last week, India's first hydrogen-powered truck was deployed for mining logistics in Chhattisgarh. This was followed by the Indian Oil Corporation signing an MoU with Hyundai Motor India to explore the feasibility of mass-market adoption of hydrogen fuel cell vehicles (HFCVs), while Indian Railways announced plans for a hydrogen-powered train. These developments prompt a closer examination of the technology enabling this transition – hydrogen fuel cells that power Hydrogen fuel cell vehicles. Hydrogen Fuel Cells (HFCs) generate high-quality electric power that is clean, quiet, and consistently reliable by converting the chemical energy stored in Hydrogen into electrical energy. The primary components of an HFC are the Membrane Electrode Assembly (MEA) and the bipolar plates. The MEA is where the electrochemical reaction takes place. It consists of a Proton Exchange Membrane (PEM) placed between two catalyst layers – anode (where hydrogen gas enters the fuel cell) and cathode (where oxygen from the air enters). Surrounding them are Gas Diffusion Layers that help distribute reactant gases (hydrogen and oxygen) and remove byproducts (water and heat). Let's understand it in detail. First, hydrogen fuel (H2) is passed through the anode and is split into protons (H+) and electrons (e-) via oxidation using a catalyst. Then the PEM allows only protons to pass through to the cathode. Electrons flow through an external circuit, generating electricity. At the cathode, oxygen (O2) from the air interacts with the catalyst and undergoes reduction. Subsequently, Oxygen reacts with the protons that have passed through the membrane, and the electrons from the external circuit to produce water (H2O). The bipolar plates facilitate gas distribution, electron conduction between cells in a stack, and heat management. This continuous electrochemical process converts the chemical energy of hydrogen directly into electrical energy with water vapour as the only byproduct. This continuous process can generate energy as long as fuel and oxidants are supplied. Due to their operation via electrochemical reactions, HFCs have no moving parts, making their operation silent and highly reliable. These technological advantages of HFCs form the backbone of Hydrogen Fuel Cell Vehicles (HFCVs), which represent a significant innovation in clean transportation. As mentioned earlier, they run on electric motors powered by fuel cells, which generate electricity through the electrochemical reaction of compressed hydrogen with atmospheric oxygen — emitting only water vapour as a byproduct. Since they use electric motors, HFCVs are classified as Electric Vehicles (EVs). They produce much smaller quantities of greenhouse gases and none of the air pollutants that cause health problems. Given that hydrogen is one of the most abundant elements on Earth, it holds strong potential as a viable alternative to conventional Internal Combustion Engine (ICE) vehicles. Thus, HFCVs offer a vast array of advantages in the quest for clean and sustainable transportation systems. They have no tailpipe emissions other than water vapour, ensuring the prevention of localised air pollution – this can be of critical importance for cities struggling with poor air quality. HFCVs also support rapid refueling, comparable to conventional ICE vehicles, and provide extended driving ranges. This alleviates concerns regarding range limitations and lengthy recharge times often associated with battery EVs. Their silent operation and efficient energy conversion process are further advantages. Additionally, hydrogen's high energy-to weight ratio allows for longer ranges without requiring excessively large or heavy fuel storage, making it ideal for larger vehicles like buses and trucks where downtime for charging can be a significant issue. However, HFCVs have challenges too. Despite the impressive potential of HFCVs, there are a few drawbacks that hinder their large-scale adoption. Hydrogen refuelling infrastructure in India is minimal, limiting the range and operational viability of such vehicles. Further, the costs of producing Hydrogen, its compression, transportation and storage are exorbitant, particularly when using sustainable methods. Therefore, the initial capital outlay required to create HFCVs and supporting infrastructure is significantly higher than that for battery electric vehicles (EVs). The high cost of materials and limited scale of production adds to the issue. There is also a need to improve the overall lifespan and durability of fuel cells. Finally, public concerns regarding the safety of hydrogen, despite stringent safety measures in place, may slow the adoption of HCFVs. It is important to note that while HFCVs ensure clean transport and prevent carbon emissions during operation, their overall sustainability depends on the source of the hydrogen they use. For HFCVs to be truly clean and sustainable, the hydrogen must be Green Hydrogen, produced via the electrolysis of water using renewable energy. This process has near-zero greenhouse gas (GHG) emissions. Other forms of hydrogen – Blue Hydrogen produced from fossil fuels with carbon capture, Gray Hydrogen produced from natural gas, and Brown Hydrogen produced from brown coal – all emit carbon at various levels and are thus not considered clean energy sources. The National Green Hydrogen Mission was approved by the Union Cabinet in 2023, recognising the role of Green Hydrogen in India's ambitions of energy independence by 2047 and Net Zero by 2070. Supported by the Ministry of New and Renewable Energy (MNRE), NGHM views Green Hydrogen as a sunrise sector for India. It has the objective of making India a global hub for the production, usage and export of Green Hydrogen and its derivatives. To achieve these objectives the mission aims to build capacity to produce at least 5 MMT (Million Metric Tonne) per annum. The NGHM has identified heavy-duty, long-haul transportation as a key area where HFCVs can make optimal impact. It has mooted the idea of 'Hydrogen Highways' – along which Hydrogen production and distribution infrastructure and refuelling stations are established – to enable unhindered, zero-emission movement of commercial vehicles such as inter-state buses and freight trucks. The Hydrogen Valley Innovation Cluster (HVIC) programme is a strategic initiative under the NGHM to promote the deployment of hydrogen technologies across various sectors within specific geographical regions, creating integrated 'hydrogen ecosystems' or 'hydrogen valleys.' The main focus sectors of the HVIC programme are mobility, industry and energy. By creating clusters of hydrogen activity, the programme aims to accelerate technological development and build necessary infrastructure to make green hydrogen a viable and sustainable energy solution for India through a phased, decentralised approach. HVIC projects have already been initiated in Kerala, Tamil Nadu, Gujarat, Maharashtra, and Rajasthan. To sum up, the large-scale adoption of HFCVs necessitates a multi-pronged effort. There is a need to scale up the production of Green Hydrogen and establish hydrogen refuelling centres across the country, realising the concept of Hydrogen Highways. Equally important is the need to support Research and Development in the field of hydrogen cells to reduce cost and improve the durability of these cells. In addition, supportive government policies and incentives, including subsidies and mandates for clean vehicle adoption, can help drive early adoption by consumers. The establishment of a clean hydrogen economy will significantly contribute to India's clean energy and Net Zero targets. Why is hydrogen considered a clean energy source for transportation? How do hydrogen fuel cells work? Widespread adoption of Hydrogen Fuel Cell Vehicles can significantly improve air quality in India's most polluted cities. Comment. How do the operational advantages of Hydrogen Fuel Cell Vehicles (e.g., silent operation, rapid refueling) stack up against their technical and economic challenges? How does the National Green Hydrogen Mission aim to position India as a global leader in hydrogen energy? What role can Hydrogen Fuel Cell Vehicles play in India's broader clean energy and Net Zero strategies by 2047 and 2070? (Kannan K is a doctoral candidate in Political Science at the Centre for Economic and Social Studies, Hyderabad.) Share your thoughts and ideas on UPSC Special articles with Subscribe to our UPSC newsletter and stay updated with the news cues from the past week. Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X.
