What to Read in Indian Express Editorial( Topic and Syllabus wise)

Editorial 1 : A Win-Win for Environment

Context: Need for Delhi to shift to EVs

 

Introduction: Delhi, which faces perennial pollution problems, can reap significant economic, social, and environmental benefits by converting all vehicles into electric vehicles (EVs).

 

Sources of Air Pollution in Delhi

• Transport sector accounts for 48.37 Gg of PM2.5 every year.
  1. Cars, comprising 32.44% of the fleet, have a 25.54% share of total emissions.
  2. Commercial vehicles make up just 2.56% of the total fleet but they are responsible for nearly 39 % of total transport emissions.
  3. Two-wheelers dominate the fleet at 61.84% but their emission share is relatively low.
• Crop burning in Punjab and Haryana, a seasonal phenomenon adds to Delhi’s air pollution.
  1. But it has decreased significantly in the last four years.
• Limitations of CNG Vehicles
  1. CNG vehicles emit NOx and add to ozone pollution.
  2. They are also secondary PM emitters under certain meteorological conditions.

 

Benefits of EV Transition

• Transitioning to EVs in Delhi can drastically reduce healthcare spending and improve air quality.
• Reduction in Air Pollution
  1. A complete transition to EVs in Delhi can reduce PM2.5 concentration by nearly 40%.
  2. Even partial transitions, such as converting cars older than 15 years to EVs, can achieve 9% reduction in PM2.5 concentration and 6% savings in per capita healthcare costs.
• Economic Gains
  1. Complete transition to EVs in Delhi can lead to savings of Rs 11,000 crore.
  2. Mortality-related costs could decrease by 25.7%.
• Healthcare Benefits
  1. Transitioning to EVs can significantly lower disability-adjusted life years (DALYs) by reducing pollution-related diseases.
  2. Per capita healthcare costs can drop by 25%.

 

Delhi's EV Policy and Support

• Delhi introduced an EV policy in 2020, which was extended to 2025 last year.
• Subsidies: Delhi government offers subsidies of up to Rs 30,000 for two-wheelers and Rs 1.5 lakh for electric cars, based on battery capacity.
• Charging Infrastructure: The policy also envisages installing 25 new charging stations across the city.

 

Challenges in EV Transition

• The costs of EV vehicles are high, charging stations are few, charging speeds low.
• Import Dependency: Lithium-ion and other chemicals have to be imported and there are concerns about the environmental impact of battery production.
• Low consumer awareness.

 

Conclusion: Making Shift in 2025

A shift to EVs can significantly reduce the disability-adjusted life years in terms of mortality and morbidity and lower per capita increase in healthcare spending. The shift will also address climate concerns. It’s, therefore, a win-win proposition for the environment.

Editorial 2 : Forex & Fertiliser

Context: Fertilizer subsidies: Let the market decide

 

Introduction: The rupee’s slide, from around 83.8 to 85.8-to-the-dollar between end-September and now, has introduced a new source of uncertainty for economic agents and policymakers.

 

Impact on Commodities and Costing

• Dollar-Rupee Exchange Dynamics
  1. For nearly two years, the rupee remained in the 82-84 range, making pricing calculations relatively predictable.
  2. The current exchange rate of 85.8 adds an additional layer of complexity, as prices now depend on both dollar-denominated costs and the rupee’s exchange rate.
• Rising Commodity Prices
  1. Brent crude has crossed $75/barrel, further straining fiscal calculations.
  2. Depreciation of the rupee increases the cost of imports, including critical goods like fertilisers.

 

Fertiliser Industry

• Impact on DAP (Di-Ammonium Phosphate)
  1. DAP is India’s second-most consumed fertiliser after urea.
  2. The current landed import price of DAP is over $630/tonne.
  3. A Rs 2-to-the-dollar depreciation raises the import cost by Rs 1,260/tonne.
• Government and Industry Challenges
  1. Fertiliser companies are hesitant to import due to increased import costs and uncertainty over the government’s stance on passing costs to farmers.
  2. The government wants to maintain the maximum retail price (MRP) at Rs 27,000/tonne, which creates a fiscal burden.
• Government Subsidy Measures
  1. The government has extended a special subsidy of Rs 3,500/tonne on DAP for another year.
  2. However, this subsidy does not fully cover the additional cost caused by rupee depreciation.
  3. The government faces two choices either allowing an MRP hike or incur a higher fertiliser subsidy bill.

 

Economic Implications

• Wake-Up Call for Key Stakeholders
  1. The rupee’s depreciation highlights vulnerabilities for both the government and firms with unhedged foreign currency exposures.
• An overvalued rupee made it easier for the government to keep prices of imported fertilisers and fuel artificially low for farmers/consumers and for firms to borrow cheap in dollars without protecting against exchange risk.

 

Way Forward: Recommendations

• Strengthen Domestic Supply Chains
  1. Companies need to invest in domestic production capacity to reduce reliance on imports.
  2. Building robust supply chains will mitigate the impact of currency fluctuations.
• Encourage Hedging Practices: Firms with foreign currency exposure should adopt hedging mechanisms to minimize risks.
• Gradual Market Liberalization
  1. Allow market forces to play a larger role in determining prices of goods like fertilisers.
  2. This will reduce fiscal burdens and ensure pricing reflects true costs.
• Subsidy Rationalization: The government should re-evaluate its subsidy policies to balance fiscal sustainability and consumer affordability.

 

Conclusion

The rupee’s depreciation serves as a critical reminder for policymakers and businesses to adapt to changing global and domestic dynamics. While the short-term impact includes higher import costs and fiscal pressures, it also presents an opportunity to strengthen domestic production capabilities, reduce over-reliance on subsidies, and embrace market-driven solutions.