Formation of Expert Panel to Revise Wholesale Price Index (WPI)

The Centre announced the establishment of an expert panel on January 2, 2025, to revise the constituents of India’s Wholesale Price Index (WPI).  This revision is in response to structural changes in the economy since 2011-12, the current base year, to 2022-23, which will be the new base year.

Objectives and Tasks of the Expert Panel

• The panel, led by Niti Aayog member Ramesh Chand, will review and revise the composition and compilation methodology of the WPI and a new Producers’ Price Index (PPI).
• Approved by the technical advisory panel on Statistics of Prices and Cost of Living, the group aims to improve the accuracy and reliability of these indices.
• The panel is expected to submit its final report by June 30, 2026.

Terms of Reference

• Review and improve the current system of price collection.
• Decide on the computation methodology for both WPI and PPI.
• Suggest further improvements in the compilation and presentation formats of the PPI.
• Recommend a roadmap for transitioning from the WPI to the PPI.
• Propose any other necessary improvements for enhancing the indices' reliability.

Panel Composition

The panel consists of 18 members, including:

• Eight officials from Ministries of Statistics, Finance, Petroleum and Natural Gas, Agriculture, and Consumer Affairs.
• A representative from the Reserve Bank of India (RBI) and the Chief Executive Officer of the Goods and Services Tax Network.
• Private sector economists and 2 non-official members. 

Additional Provisions

The Ministry has stated that the Chairman of the Working Group may include other experts or representatives from various agencies as deemed necessary.

Overview of School Facilities in India

The latest data from the Unified District Information System for Education (UDISE+), maintained by the Ministry of Education, provides insights into the infrastructure of schools across India.

Electricity

• Out of 14.71 lakh schools, approximately 1.52 lakh schools lack functional electricity.
• 10.17 lakh are government-run schools; 9.12 lakh have electricity, leaving 1.52 lakh without it.
• Among 4.54 lakh other schools (government-aided, private, unaided), 4.07 lakh are electrified.

Drinking Water

• 14.47 lakh schools have drinking water, with 14.11 lakh having functional facilities.
• Government schools: 9.78 lakh of 10.17 lakh have functional facilities.
• Other schools: 4.33 lakh of 4.46 lakh have functional facilities.
• 24,580 schools lack drinking water facilities within premises.

Toilets

• 14.50 lakh schools have toilets, but only 14.04 lakh are functional.
• 67,000 schools lack functional toilets, most (46,000) are government schools.

Disabled-Friendly Facilities

• Only 3.37 lakh (33.2%) of 10.17 lakh government schools have disabled-friendly toilets; 30.6% are functional.
• In government-aided schools, 35,640 (44.4%) of 80,313 have disabled-friendly toilets.

Ramps and Handrails

• 11.34 lakh schools (77%) have ramps; 7.69 lakh (52.3%) have ramps with handrails.

Computers and Internet

• 7.48 lakh schools (50%) have functional computers for teaching and learning.
• 7.92 lakh schools have Internet, 8.41 lakh have computer facilities.
• Government schools: 4.42 lakh (43.5%) of 10.17 lakh have computers for educational purposes.
• Private unaided schools: 2.34 lakh (70.9%) of 3.31 lakh have this facility.

Co-curricular Activity Rooms

• Only 17.5% (2.57 lakh) of schools have arts and crafts rooms.
• In government schools, only 9.9% of 10.17 lakh have arts and crafts rooms.

Science Laboratories

• Of 2.86 lakh secondary schools, only 1.6 lakh have integrated science labs.
• Among government secondary schools, 50.2% of 1.19 lakh have science labs.

Solar Panels

• Only 1.54 lakh schools (10.5%) have solar panel facilities.
• In government schools, 89,746 (8.8%) of 10.17 lakh have solar panels installed.

Pre-Budget Consultation Highlights: Reforms for NBFCs

During a pre-Budget consultation, the Finance Industry Development Council (FIDC) emphasized the need for reforms to alleviate operational challenges and improve liquidity for Non-Banking Financial Companies (NBFCs).

Key Reform Proposals

• Reduction in SARFAESI Act Threshold:
  • Proposal to lower the loan amount threshold for enforcing security interest under the SARFAESI Act from Rs 20 lakh to Rs 1 lakh.
  • The current high threshold leads to resolution delays of up to five years, increasing non-performing assets (NPAs) and legal costs.
• Regulatory Norm Relaxation:
  • Facilitate easier fund-raising from banks to ease financial pressures on NBFCs.
• Creation of Dedicated Funds:
  • Proposed for supporting sectors like MSMEs, electric vehicles, infrastructure, and green energy.
  • Aim to boost NBFCs' lending capacity to emerging industries.
• TDS Exemption:
  • Request for exemption from the 10% Tax Deduction at Source (TDS) on interest payments.
  • The current TDS system creates cash flow constraints and operational complexities for NBFCs.
• Co-lending Arrangements:
  • Need for harmonization of TDS provisions between banks and NBFCs to simplify operations.
• Refinance Options:
  • Development financial institutions like SIDBI should provide refinance options to NBFCs for on-lending to MSMEs and priority sectors.

Attendees

The meeting included Union Finance Minister Nirmala Sitharaman and officials from major financial institutions, showcasing the significance of the discussion.

Summary of Key Recommendations

• Establishment of a dedicated fund for MSMEs, EVs, infrastructure, and green energy.
• Reduction of SARFAESI Act threshold to Rs 1 lakh to expedite case resolutions.
• Treating NBFCs at par with banks in terms of regulations and exemptions.
• Exemption of 10% TDS on interest income for NBFCs.

Supreme Court Judgment on Land Compensation

The Supreme Court of India made a significant judgment concerning the rights of landowners whose properties were acquired for the Bengaluru-Mysore Infrastructure Corridor (BMIC) project. This case underscores the importance of the right to property as both a human and constitutional right.

Key Judgment Details

• The court mandated that compensation for the land acquired should be based on the market value prevailing in April 2019, not the value at the time of initial acquisition in 2003.

Constitutional and Human Rights Consideration

• Right to Property: Recognized as a human right and protected under Article 300-A of the Indian Constitution.
• The state is prohibited from dispossessing citizens of their property without following the legal procedure.

Economic Rationale and State Responsibility

• Economic Value of Money: The court emphasized that the value of money changes over time due to inflation, affecting the purchasing power of the compensation.
• State's Role: The court criticized the Karnataka government for its delay, stressing that it should have acted proactively to ensure timely compensation.

Implications of the Judgment

• This judgment reinforces the principle that compensation for acquired land should reflect current market values, not historical ones.
• It highlights the state's obligation to promptly and adequately compensate landowners, adhering to constitutional and legal mandates.

Highlights of 2024 Space and Astronomical Events

The year 2024 was packed with significant astronomical and spaceflight milestones:

• A solar eclipse was visible across North America.
• Two robotic landers successfully reached the lunar surface.
• The most powerful rocket booster was captured using mechanical arms called "chopsticks."
• A mission to Jupiter's icy moon Europa commenced.
• Private astronauts conducted a notable spacewalk.

Anticipations for 2025 in Space Exploration

Jeff Bezos' Entry into the Space Arena

Jeff Bezos, through his company Blue Origin, is set to challenge Elon Musk's dominance in space exploration:

• Blue Origin's New Glenn rocket, designed to be fully reusable, is expected to launch in 2025.
• The rocket aims to reduce launch costs and may carry national security satellites, NASA spacecraft, and Amazon's Project Kuiper satellites.
• Project Kuiper will compete with SpaceX's Starlink by providing internet services from space.

Rubin Observatory's First Light

The Rubin Observatory, named in honor of Vera Rubin, will play a crucial role in astronomical research:

• Equipped with the world's largest digital camera, it will create a time-lapse motion picture of the Southern sky.
• The observatory will aid in understanding dark matter and dark energy, key components of the universe.

U.S. Lunar Exploration and Policy Changes

U.S. space policy, influenced by presidential changes, focuses on lunar missions:

• Under Trump's new administration, existing space plans could be altered, with potential shifts towards Mars exploration.
• Robotic missions to the moon are planned, with companies like Firefly Aerospace and Ispace launching landers in early 2025.
• Intuitive Machines' second lunar lander, Athena, will attempt to find ice samples on the moon.

India's Space Ambitions

India is making strides in space with a focus on human spaceflight:

• Indian astronaut Shubhanshu Shukla is set for a mission to the International Space Station in collaboration with Axiom Space.
• India's Gaganyaan program is preparing for an uncrewed test launch, potentially leading to a crewed mission by 2026.

New Milestones and Spacecraft

Several new rockets and spacecraft are poised to take flight in 2025:

• SpaceX's Starship, the most powerful rocket, may achieve further milestones, including a "chopsticks" catch after an orbital flight.
• Rocket Lab is developing Neutron, a reusable rocket.
• Sierra Space's Dream Chaser space plane aims to deliver cargo to the ISS for the first time.

Development of Advanced Injectable Hydrogel for Cancer Treatment

Researchers from the Indian Institute of Technology-Guwahati (IIT-G) and the Bose Institute, Kolkata have innovated an advanced injectable hydrogel for targeted cancer therapy, focusing primarily on breast cancer treatment.

Key Features of the Hydrogel

• Controlled Drug Release: Acts as a stable reservoir for anti-cancer drugs, ensuring controlled release while safeguarding healthy cells. 
• Localized Treatment: Designed to address limitations of traditional methods like chemotherapy and surgery, particularly for hard-to-reach internal tumors. 

Hydrogel Composition and Mechanism

• Structure: Composed of water-based, three-dimensional polymer networks mirroring living tissues, suitable for biomedical applications. 
• Composition: Utilizes ultra-short peptides, which are biocompatible and biodegradable. 
• Mechanism: Responds to high levels of glutathione (GSH) found in tumor cells to trigger controlled drug release, minimizing interaction with healthy tissues. 

Research Findings and Efficacy

• Preclinical Trials: Demonstrated significant efficacy in a murine model of breast cancer, with a ~75% reduction in tumor size within 18 days post a single injection. 
• Drug Delivery: The hydrogel localizes at the tumor site, releasing drugs steadily and reducing systemic side effects. 
• Advantages: Enhances drug effectiveness and reduces dosage requirements, minimizing toxicity and promoting cancer cell death. 

Implications

This innovative approach exemplifies how scientific advancements can address urgent needs in cancer treatment by offering precision drug delivery, improving drug uptake, inducing cell cycle arrest, and supporting programmed cell death.

U.S. and Panama Canal Dispute

On December 22, 2024, Donald Trump threatened to reclaim the Panama Canal, criticizing the  treaty as "foolish." He demanded its return to the U.S., stating concerns over unfair treatment of the U.S. Navy and Commerce. Panama’s President José Raúl Mulino rejected Trump's assertions, affirming Panama's ownership of the canal.

Why is Trump Upset with Panama?

• High Transit Fees: 
  The primary concern is the elevated transit fees imposed by the ACP (Panama Canal Authority) on U.S. vessels. A severe drought in 2023 affected water levels in Lakes Gatun and Alhajuela, crucial for canal operations. This led to a 36% reduction in crossing slots, thereby increasing transit fees.
• Chinese Influence: 
  The rise of Chinese presence in the canal is unsettling for the U.S. In 2017, Panama signed a Belt and Road Initiative (BRI) agreement, boosting Chinese investments. Hutchison Ports PPC, a Hong Kong-based firm's subsidiary, operates ports near the canal's entrances, raising concerns about China's influence over operations and U.S. Navy surveillance.

What is the U.S.-Panama Treaty?

• The Panama Canal, an 80-kilometer artificial waterway, connects the Atlantic and Pacific Oceans, vital for global trade, facilitating 6% of maritime trade. 
• The Torrijos-Carter Treaties of 1977 led to the U.S. transferring control of the canal to Panama on December 31, 1999. The treaties established the canal's neutrality and allowed the U.S. rights to defend its neutrality and priority passage during military emergencies.

Panama’s Response

• President José Raúl Mulino refuted Trump's claims, asserting the transparency and international standard compliance of the transit fees. He dismissed allegations of foreign influence, emphasizing Panama’s sovereignty and clarified the absence of Chinese military presence.

What Next?

• Diplomatic discussions are expected to address concerns over fee hikes and operational logistics. While the U.S. may pressure Panama for renegotiations, Panama seeks international support to uphold its sovereignty.
• China responded by acknowledging Panama’s ownership of the canal, with Foreign Ministry spokesperson Mao Ning highlighting the canal's significance to Panama and respecting its sovereignty.

Supreme Court Ruling on Right to Property

The Supreme Court of India ruled that the right to property is both a human and constitutional right, ensuring that no individual can be deprived of property without adequate compensation. The judgment highlighted the potential adjustment of valuation dates in cases of excessive delay in compensation disbursement.

Constitutional Context

• The right to property was removed from being a Fundamental Right by the Constitution (Forty-Fourth Amendment) Act, 1978.
• It remains a constitutional right under Article 300-A, which mandates no deprivation of property without legal authority.

Case Context

• The ruling was in response to an appeal concerning a Karnataka High Court decision regarding the Bengaluru-Mysuru Infrastructure Corridor Project.
• Landowners had not received compensation, leading to a postponement of the valuation date by the Special Land Acquisition Officer (SLAO) from 2003 to 2011.

Supreme Court's Decision

• The Supreme Court upheld the lower court's stance that only it, or a High Court, can change acquisition dates under Article 32/142 or Article 226.
• The Court ruled it was appropriate to use Article 142 to adjust the valuation date for just compensation.
• The SLAO was directed to base compensation on the market value as of April 22, 2019, granting statutory benefits from the 1894 Land Acquisition Act.

This ruling emphasizes the protection of property rights within the Indian legal framework, highlighting both constitutional mandates and the role of judicial authority in ensuring fair compensation.

Air India's Onboard Wi-Fi Service Rollout

Air India has become the first airline in India to offer Wi-Fi Internet connectivity on domestic flights. This service is initially available on select domestic and international flights.

Current Fleet Offering Wi-Fi

• Wi-Fi is available on Airbus A350, Boeing 787-9, and select Airbus A321neo aircraft.
• These aircraft are equipped with the necessary hardware for Internet connectivity.
• The service is being extended from erstwhile Vistara aircraft, facilitated by Nelco and Panasonic Avionics Corporation.

Accessing Onboard Wi-Fi

• Passengers must enable Wi-Fi on their devices and select the 'Air India Wi-Fi' network.
• They need to enter their details, such as PNR and last name, to access the internet.

Technologies for In-Flight Internet Connectivity

• Air-to-Ground (ATG) Technology: Utilizes ground-based cellular towers to provide connectivity. Limited by the availability of towers.
• Satellite-Based Connectivity: Internet from ground stations is transmitted to aircraft through satellites, offering wider coverage.

Functioning of In-Flight Wi-Fi

• Wi-Fi signals from passenger devices are collected by in-cabin antennae.
• Signals are relayed to an onboard server, then transmitted via satellites or ground towers depending on the technology used.
• Satellite systems provide signals through an antenna on the aircraft to a satellite, while ATG systems use cellular towers.

Cost Considerations

• Initial installation of antennae is costly for airlines.
• Globally, some airlines offer a limited amount of free Internet before charging for data packs.
• Airlines may offer free or discounted Internet to loyalty program members and premium passengers.
• Air India offers the service free for a limited introductory period.

India's Manufacturing Activity

In December, India's manufacturing activity experienced its slowest growth rate in 12 months due to increased competition and price pressures, as highlighted by an HSBC Purchasing Managers’ Index (PMI) survey conducted by S&P Global.

Key Highlights

• The PMI eased to 56.4 in December from 56.5 in November, indicating a slight dip in manufacturing activity.
• Despite the December slowdown, the average PMI for 2024 improved to 57.5 compared to 56.8 in 2023, suggesting a stronger annual performance.
• The rate of expansion in new orders hit its lowest for the year, hinting at potential weaker growth in future production.
• A PMI reading above 50 signifies expansion in the sector.

Factors Influencing Growth

• Advertising and positive client appetite played a crucial role in supporting sales.
• Favorable demand was the primary driver for production growth.

Challenges Faced

• Price pressures intensified, with a significant rise in container, material, and labor costs since November.
• The increase in selling prices was one of the highest in approximately 20 years.

Employment and Output Outlook

• Manufacturing employment grew for the tenth consecutive month, with hiring reaching a four-month high in December.
• Approximately 10% of companies increased their workforce, while less than 2% reduced jobs.
• The outlook for 2025 remains positive, with manufacturers expecting a rise in output despite ongoing concerns about inflation and competitive pressures.

Government Allocation for Centrally Sponsored Schemes

The government plans to maintain the allocation for Centrally Sponsored Schemes (CSS) at approximately ₹5.05 lakh crore for the fiscal year 2025-26. This decision comes amid efforts to monitor funds closely and consolidate various schemes.

Key Points

• The allocation for CSS had seen a 9.8% increase in FY24.
• Efficient fund utilization through technology and enhanced efficiency measures has been prioritized.
• The government anticipates saving around ₹30,000 crore in the current fiscal year due to stricter expenditure tracking and slow spending by states.
• As of December 1, 2024, about ₹40,000 crore remained unspent in government balances.

Single Nodal Agency (SNA) System

The transition to a Single Nodal Agency (SNA) system has facilitated better monitoring of fund usage. The central government intends to include all states on the portal by the next fiscal year, with eight states joining in 2024, bringing the total to 18.

Flagship CSS Programmes

• Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PMJAY)
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
• Pradhan Mantri Awas Yojna-Urban and PMAY-Gramin
• Jal Jeevan Mission (JJM)
• Pradhan Mantri Gram Sadak Yojna (PMGSY)

Rationalisation of CSS

The government is working towards further rationalization of CSS. In March 2015, a sub-group of chief ministers was formed by Prime Minister to address this issue, resulting in a reduction of the number of schemes from 130 to 75.

PM E-Drive Scheme and Its Impact on Electric Truck Adoption

The PM E-Drive scheme, launched to boost electric vehicle adoption in India, particularly targets the electrification of trucks. However, industry executives highlight several challenges and limitations within the scheme.

Key Challenges

• Scrapping Requirement:
  • The scheme mandates purchasing an electric truck only with a certificate of deposit from scrapping an old truck, which may deter potential buyers.
  • The financial disparity between the value of a scrapped diesel truck and a new electric one is significant, making this transition economically unfeasible for many.
• Alternative Certificate Acquisition:
  • Consumers who never owned a truck can procure a scrapping certificate from others to benefit from the incentives, which might complicate the process.
• Charging Infrastructure:
  • The limited charging network restricts the effective operational range of electric trucks to 150-200 kilometers.

Incentive Details and Industry Perspective

• Incentive Allocation:
  • Under the ₹10,900 crore scheme, ₹500 crore is allocated specifically for electric trucks over 3.5 tonnes gross vehicle weight. This is the first instance of such inclusion.
• Industry Insights:
  •  Scheme might act as a catalyst for EV adoption, particularly in medium and short-range geo-fenced applications with suitable support.

Environmental and Economic Considerations

• Environmental Benefits:
  • Electric trucks using grid-average electricity emit 17-29% fewer greenhouse gases than diesel trucks, and 78-83% fewer with renewable energy.
• Cost and Efficiency:
  • Electric trucks are approximately 65% more efficient, reducing fuel usage and operational costs.

Barriers to Adoption

• Cost Disparity:
  • The price of a 16-tonne electric truck is 4-6 times higher than its diesel counterpart, placing it out of reach for many potential buyers.
• Battery and Range Limitations:
  • Long-haul battery electric trucks are not competitive due to high costs, increased weight, and longer charging times.

Future Technological Advancements

• Hydrogen and Fuel Cell Technologies:
  • These technologies are expected to mature and be more feasible in the mid to long term, necessitating support through incentives and infrastructure development like hydrogen refueling stations.

Ministry of Skill Development and Entrepreneurship (MSDE) Initiatives

The MSDE is collaborating with five central ministries to assess their specific demand for a skilled workforce, aligning training initiatives with sector-specific and demand-specific needs under the Skill India mission.

Objective and Strategy

• Provide short-term training, reskilling, and upskilling to create a skilled workforce.
• Conduct skill gap analysis across various schemes to project the demand over the next five years.
• Plan to initiate training by the financial year 2025-26.

Benefits

This initiative aims to fast-track skill training in the country, ensuring schemes are implemented by professionally trained personnel, thereby improving effectiveness and achieving desired outcomes.

Training Programs

• Short-term training: 200-600 hours.
• Recognition of Prior Learning (RPL) based up-skilling: 30-132 hours, under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY 4.0).

Involved Ministries

• Ministry of Tourism
• Ministry of Health and Family Welfare
• Ministry of Housing and Urban Affairs
• Ministry of Consumer Affairs, Food and Public Distribution
• Ministry of Social Justice and Empowerment

Specific Schemes Requiring Skilled Manpower

• SWAGATAM under the tourism ministry.
• Municipal solid waste management under the housing and urban affairs ministry.
• Food safety and standards authority of India.
• Managing PM Kisan Samridhi Kendra.
• NAMASTE scheme (National Action for Mechanised Sanitation Ecosystem) for promoting safe sanitation practices.
  • The NAMASTE initiative aims to formalize workers engaged in hazardous cleaning and promote mechanized and safe cleaning methods.

Rural Employment Demand in India

Increase in Work Demand under MGNREGS

• Work demand under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) rose for the second month in December.
• About 25.8 million people sought work, an increase of 7.4% from the previous year.
• This included 21.58 million households, showing an 8.3% rise.
• The rise was attributed to an unfavourable base effect and the return of farm laborers post-Kharif harvest.

Factors Affecting Work Demand

• Work demand had decreased from November 2023 to October 2024 due to improved job prospects.
• High monsoon rains in the previous year encouraged a shift to farming.
• After harvesting summer crops, laborers returned to seek work in December.

Economic Indicators and Future Outlook

• Rural consumption demand remained resilient, as indicated by increased sales of two-wheelers, three-wheelers, and tractors.
• The finance ministry forecasted economic growth to reach 6.5% in FY25, up from 6% in the fiscal first half.

Summary of Fiscal Quarter Data

• In fiscal first three quarters, 229.8 million individuals from 183 million households demanded NREGS work.
• Work demand increased by 19.7% for individuals and 17.5% for households in December compared to November.