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Current Affairs - 16 May 2018

General Affairs 

Karnataka Shattered Perception That BJP North-Indian Party, Says PM Modi
  • Describing the BJP's win in Karnataka as "extraordinary", Prime Minister Narendra Modi today said he was overwhelmed by the love and affection he got from the people of the state and that language proved to be no barrier.

    "A perception has been created that BJP is a north-India party, a party of Hindi-speaking people. Gujarat isn't Hindi-speaking, nor is Maharashtra, Goa Assam or the Northeast. The people of Karnataka have given a jolt to the people who have spread a negative perception about the BJP," PM Modi told BJP supporters at the party headquarters in Delhi.

    Without naming the Congress, the Prime Minister attacked the party for what he called creating a "north-south divide" and stoking tension between the state and the centre.

    The remarks comes against the backdrop of controversial moves by the Congress government in Karnataka like having a separate state flag and a proposal to give religious minority status to Lingayats, who have traditionally seen as BJP supporters.

    Saluting party workers for their tireless efforts during the Karnataka election campaign, PM Modi tried to boost their morale. "Sweat has a fragrance and that helps the lotus (BJP's election symbol) bloom".

    The BJP that emerged the single largest party in Karnataka has staked claimed to form the government. And so has the JD(S) after the Congress extended unconditional support to it.

    PM Modi assured the people of Karnataka that the BJP won't lag in its efforts to create a "brighter future" for Karnataka. The party has already sent some of its top ministers to the state where the party is still short of the halfway mark needed to form the government.

    amit shah on karnataka result
    Karnataka result: Amit Shah accuses Congress of playing vote bank politics

    "BJP has won 14 elections. This is the 15th one. We are the single largest party. We are seven seats away from the magic figure," party chief Amit Shah told party supporters.

    "You (Congress) had 122 (seats), now down to 77. Your chief minister lost by a margin of 35,000 votes on one seat. Half the cabinet has faced defeat. On what basis are the Congress leaders smiling," asked Mr Shah.

    Accusing the Congress of trying to play caste politics with its proposal on Lingayats, the BJP chief claimed that the Congress thought only about its vote bank and misused money and muscle power. He also blamed the ruling party in Karnataka for the 10,000 voter cards found in a house in Bengaluru that led to polling being deferred on one seat.

    "Even after doing all this, the people rejected you. BJP had 40 seats, now it has 104. We have got 37 per cent of votes. The results are a clear message sent out the voters who believe in democracy," said Mr Shah.

West Bengal Election Commission Orders Repoll In 568 Booths On Wednesday
  • The West Bengal State Election Commission today ordered repolling in 568 booths on Wednesday following complaints of violence during the pancahayat polls held on Monday. "We have ordered repolling in 568 booths spread across 20 districts of the state," an SEC official said. Widespread violence during the panchayat polls in West Bengal on Monday left at least 12 people dead and 43 injured.

    The state government and the police have been asked to make elaborate security arrangements so that polling can be held in a free and fair manner, the SEC official said.

    Repolling has been ordered in 10 booths in Hooghly, 28 booths in West Midnapore, 52 booths in Coochbehar, 63 booths in Murshidabad, 60 booths in Nadia, 59 booths in North 24 Parganas, 55 booths in Malda, 73 booths in Uttar Dinajpur, 26 in South 24 Pargans, among others.

    The SEC official also said that the final voting percentage had gone up to 82.13 per cent from 73 per cent.

    Opposition parties have accused the TMC of "unleashing a reign of terror and destroying democracy". The TMC, however, has termed the allegations as "baseless".

    Aggrieved by the violence that marked Monday's panchayat polls in West Bengal, several candidates in the fray, met State Election Commission or SEC officials and demanded repolling in their booths.

    "I have come here to inform the SEC about yesterday's violence in my locality. Free and fair election did not take place in my area," said Etajul, an independent candidate from Bhangore in South 24 Parganas district.

    Candidates from political parties also met the SEC officials to request re-poll in their seats.

    Various non-political organizations conducted sit-in demonstrations outside the SEC office today in protest against Monday's violence.

Aadhaar Not Mandatory For Government Employees To Get Pension: Centre
  • Aadhaar card is not mandatory for central government employees to get their pension, Minister of State for Personnel Jitendra Singh has said.

    In the 30th meeting of the Standing Committee of Voluntary Agencies in New Delhi recently, he said Aadhaar is an additional facility to enable the use of technology for submission of life certificate without the need for visiting banks.

    His assertion assumes significance as there were reports of some retired employees facing difficulty in getting the pension in the absence of Aadhaar linkage with their bank accounts.

    The minister clarified that Aadhaar has not been made mandatory for getting pension for government employees, according to the minutes of the meeting.

    Aadhaar is a 12-digit number, issued by the Unique Identification Authority of India (UIDAI), that acts as identification and address proof.

    There are about 48.41 lakh central government employees and 61.17 lakh pensioners.

    Mr Singh cited various initiatives started by the central government for the welfare of its employees and pensioners.

    "For instance, minimum pension has been increased to Rs. 9,000, ceiling of gratuity has been increased to Rs. 20 lakh, fixed medical allowance has been increased to Rs. 1,000 per month," the minister said.

    "Constant attendance allowance has been increased from Rs. 4,500 to Rs. 6,750 with effect from July 1, 2017. Some benefits relating to income-tax e.g. standard deduction, tax-rebate etc.on interest made available in the Finance Bill, 2018," he said.

Richard Branson's Plans For Mumbai-Pune Trip In 25 Minutes
  • If Richard Branson has his way in India, hyperloop travel could turn out to be cheaper than a flight ticket.

    Virgin Hyperloop One, the futuristic transportation company backed by the British tycoon, wants to build a network of high-speed pods that can carry people and cargo across India. It's looking to price the ride at less than what airlines charge in a market where air travel is growing at the fastest pace in the world. But, fares will still be more expensive than first-class train coaches, Harj Dhaliwal, Hyperloop One's managing director for Middle East and India, said in an interview.

    "India is a super price sensitive market," he said. "We are in the process of price modeling. We want to keep fares as low as possible to stimulate demand but not so cheap that will drive away financial or private investors from the project."

    The Los Angeles-based company has been working on a technology that uses magnetic levitation and low-pressure tubes to achieve airplane-like speeds. Branson has been pitching this concept to Indian authorities as a fix for the South Asian country's infrastructure bottlenecks. Hyperloop One has been testing in Nevada with speeds reaching 240 miles an hour, and is planning three production systems in service by 2021, according to its website.

    Though the science behind these pods has been mostly confined to the realm of science fiction, since futurist and billionaire Elon Musk first theorized a model in 2013, a few companies and investors have been plowing money to win the race for the first working system. Hyperloop One is backed by investors including DP World Ltd., Caspian VC Partners, the Virgin Group and Sherpa Capital.

    richard branson bloomberg
    Richard Branson has been pitching this concept to India as a fix for the country's infrastructure bottlenecks

    In February, Branson signed a preliminary agreement in Mumbai for a broad hyperloop framework and mooted a Mumbai-Pune system that would shrink travel time to 25 minutes and save about three hours. The first Indian commercial hyperloop between the two cities is targeted to roll by 2025, two years after India aims to complete its maiden bullet train project linking the commercial hubs of Mumbai and Ahmedabad.

    For instance, an economy seat on a flight from Pune to Mumbai a week from now would cost about 10,000 rupees ($150), while the first-class train fare for the 90-kilometer (56-mile) trip is about 1,165 rupees.

    The project may not be all as easy as it sounds, said Mathew Antony, a Mumbai-based managing partner at Aditya Consulting, a boutique business advisory firm. It needs to be truly affordable to the masses to be successful, and hurdles in the form of opposition to land acquisition could complicate the execution, he said.

    "Hyperloop is an excellent idea only if it is to be developed as a mass transport mode," Antony said.

    Hyperloop One has ambitions. It's in talks with the southern states of Andhra Pradesh and Karnataka for possible projects, said Josh Giegel, co-founder and chief technology officer.

    "Our goal is to build a national network," he said. "We want to showcase our capabilities through the Pune-Mumbai route in India. We want to demonstrate bite-sized chunks of 100 kilometers (62 miles) and 150 kilometers before we build 1,000 kilometers of national network in India."

BSF Jawan Killed In Jammu In Ceasefire Violation By Pakistan
  • A Border Security Force jawan was killed in ceasefire violation by Pakistani army along the International Border (IB) in Samba district of Jammu and Kashmir, a senior BSF official said today.

    The firing from across the border comes barely four days ahead of the visit of Prime Minister Narendra Modi to the state, and also ended months of lull in the border skirmishes along the IB, which saw heavy Pakistani firing and shelling earlier this year.

    Pakistani troops resorted to unprovoked and indiscriminate firing on forward posts in the Manguchak area around 11.30 pm last night and was effectively retaliated by the jawans guarding the IB, the officer said seeking anonymity.

    He said heavy firing between the two sides continued for an hour during which Constable Devender Singh was hit by a stray bullet through the loophole of his picket.

    He was immediately evacuated to a hospital but could not survive, the officer added.

    He said intermittent firing between the two sides was still continuing when last reports were received.

    The incident came barely 24 hours after BSF noticed suspicious movement of a group of five persons, believed to be terrorists and attempting to sneak into this side, along the IB in Hiranagar sector of nearby Kathua district, prompting a massive search operation and sounding of a high alert in Jammu.

    Army also pressed helicopters into service during the search operation which entered the second day today, the official said.

    Devender Singh's death took the number of people killed in over 700 incidents of Pakistani shelling along the IB and Line of Control (LoC) in the state - highest this year - to 33. The deceased included 17 security personnel.

    Prime Minister is scheduled to arrive in Jammu and Kashmir on May 19.

    There has been a lull in firing along the IB over the past three months after intense border skirmishes in January and February, which led to many casualties and forced civilians to flee their homes.

Business Affairs

WOW air to enter India, offers Rs 13,499 fare for 15 North American cities
  • Serial entrepreneur Skuli Mogensen founded WOW air in 2012, four years after selling his last venture - Oz Communications - in the mobile software space to Nokia. Mogensen says that he was almost in the retirement mode when he decided to start an airline in his native country Iceland. In a span of six years, WOW air has reached a scale where it's almost neck-and-neck with legacy carrier Icelandair, an airline started in 1937. "We will overtake them by next year in market share," he says.

    After disrupting the aviation market in Iceland, Mogensen is bringing his low-cost carrier to India - New Delhi to begin with - and offering one-way fares as low as Rs 13,499. The introductory fares would connect passengers from New Delhi to any of the 15 North American cities - New York, Los Angeles, Boston, Chicago, and Toronto - and London that are part of $484-million WOW's current network. There will be a stopover in Reykjavik (Iceland).

    The services will start in December this year subject to getting slots at the Delhi airport. WOW is already negotiating with GMR to get five slots per week, preferably departure slots at around 6am, for its wide-body Airbus A330neos. "We are going ahead with the sales with the assumption that we will get the slots that we have requested."

    About 20,000 people fly between India and North America every day. "We will be the first long-haul low-cost airline to fly into India. It's a huge market with a huge potential. I think India is underserved when you look at flights between India and North America. We are exploring possibilities to open stations in more Indian cities. Our target customers are smart travellers - people who are value conscious," says Mogensen.

    WOW would offer four products; the basic product doesn't include check-in baggage and meals.

    It flies to 35 European and North American destinations, and it would be competing with aggressive Middle-eastern hubs like Dubai and Abu Dhabi which are catering to a large international traffic originating from India. "We will offer a shorter total trip time than if you go to Dubai. Shorter flight time means less engine usage, less costs that translates into less ticket price. In our case, it takes 18 hours to reach East Coast (in the US) from India, including a two-hour layover in Iceland," he says.

    With crude oil prices rising, Mogensen says that he's not that worried unless the prices go beyond $100 a barrel. "Oil is last century's commodity. We will be operating A330neos which are 15 per cent fuel efficient [than the old engine] and will help in keeping costs under control. The other reason we can offer low fares is that we offer more services beyond selling seats. When someone comes to Iceland, we can offer best prices on hotels, car rentals, and restaurants. We will extract revenues from other sources," he adds.

Focus on renewables can create 1.5 million jobs in India: ILO report
  • Employment projections suggest that the net effect on job numbers created in the sustainability sector will be positive.

    In India, the transition to a green economy will inevitably cause job losses in certain sectors as carbon- and resource-intensive industries are scaled down. But these will be more than offset by new job opportunities, according to the ILO report World Employment and Social Outlook 2018: Greening with jobs.

    Measures taken in the production and use of energy, for example, will lead to job losses of around 2,59,000, but it will also create around 3 million jobs.

    The net increase of approximately 2.8 million jobs will be the result of the adoption of sustainable practices, including changes in the energy mix, the projected growth in the use of electric vehicles and increases in energy efficiency in existing and future buildings. Regarding the sectoral impact, 1.5 million jobs will be created in the renewables.

    This overall net jobs benefit comes with sectoral differences. For India, all sectors except the mining industry will experience an increase in employment. For example, 1.5 million jobs are expected to be created in the renewables sector, 4,66,200 jobs will be created in the construction space and 2,85,200 new jobs are expected in the services industry. To ensure a just transition, efforts to promote the green economy must be accompanied by policies that facilitate the reallocation of workers, advance decent work, offer local solutions and support displaced workers.

    For example, public employment programmes have become crucial policy tools that combine economic, social and environmental objectives in support of adaptation and mitigating environmental degradation and climate change. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in India is aimed at providing social protection and economic security for rural people in poverty, strengthening drought-proofing and flood management, and empowering marginalised communities. Through the MGNREGA, each rural household is entitled to 100 days of employment a year. People are employed in unskilled manual work such as construction or improvement of community infrastructure or generation of ecosystem services that protect environmental resources. According to the Ministry of Rural Development, 60 per cent of the work hours provided through the programme in 2012 involved water conservation and 12 per cent related to the provision of irrigation facilities.

    Environmental sustainability was a central objective of India's Five-Year Plan (2012-17). This Plan led to the creation of the Skills Council for Green Jobs in 2015. The council has already identified skills needs in renewable energy, energy efficiency and waste and water management, and developed 26 courses for occupations in demand such as water treatment plant helper to solar photovoltaic project manager. Private institutions are also involved and have developed 70 courses related to environmental sustainability.

ED starts probe into alleged wrongdoings in Air India
  • A successful institution is nothing more than a set of right decisions taken at the right time by its key people and supported by rank and file. The current mess at the loss-making Air India (AI) could be linked to lapses by its management in three years to 2007, the year the airline was merged with its domestic operations arm, Indian Airlines.

    As the government plans to sell 76 per cent stake in AI, the Enforcement Directorate (ED) has started investigations into several alleged wrongdoings in the national carrier. Last year, the Central Bureau of Investigation (CBI) had filed three cases against unnamed officials in the civil aviation ministry and the airline for gross irregularities.

    The most glaring lapse pertains to the ordering of 111 aircraft - 68 Boeings and 43 Airbus - worth about Rs 70,000 crore. It was alleged in a CAG report in 2011 that the aircraft acquisition was "a recipe for disaster" for the airline and contributed significantly to its debt pile. As per Air India's EoI (expression of interest) document, the airline has an outstanding debt of Rs 48,781 crore.

    The CAG report had pointed that it took nearly eight years for the airline to finalise the plan to buy 28 planes, but the number was revised upwards to 68 in a short span of time, and too arbitrarily. The revision was made without any audit scrutiny and appeared to be supply-driven (unlike the situation where an airline orders aircraft to meet the growing passenger demand).

    The ED would now examine the processes that were followed in finalising the aircraft contracts and the implementation of the aircraft acquisition plan. The ED is already examining decisions taken by AI to surrender its profit-making routes and schedules to allegedly favour private carriers.

    For AI, the bad phase really began in 2004 and got worse with the merger with IA (which is also under CBI's scrutiny), and subsequently led to erosion of market share (from 42 per cent in 2004 to 13.4 per cent in March 2018), rise in debt and losses, and wastage of more resources to recoup losses. The airline is still reeling under the burden of poor decisions taken more than a decade ago.

    While everybody seems to acknowledge the mistakes, nobody has the antidote to the AI's problems. For instance, AI's former CMD Ashwani Lohani, in a blogpost in 2016, had said that AI's merger led to a mess. Last year, former civil aviation minister Praful Patel, who was the heading the ministry at the time of merger, said that the decisions were "multi-tiered and collective".

    The government now thinks that privatizing AI is the only way to turn it around. Whether there were irregularities or not, only time will tell, but the fall of AI from a market leader to an also-ran makes it a fit candidate for a case study in management textbooks.

Sensex, Nifty close marginally lower as Karnataka poll results signal coalition govt
  • The Sensex and Nifty erased all their intra day gains today after PM Narendra Modi-led BJP struggled to reach the halfway mark of 112 seats to form the next government in Karnataka.  The BJP won 104 seats after counting for 222 seats was concluded for Karnataka Assembly elections today.  The Congress was able to retain 78 assembly seats with JDS winning on 38 seats. Independent candidates won on two assembly seats. All three parties were exploring options to form a coalition government in the state when counting for the election came to an end in the evening.  

    While the Sensex closed 12 points lower to 35,543, Nifty stood at 10,801, down 4.75 points.  Of 30 Sensex stocks, 16 ended lower.

    The Indian rupee too followed the stock market and fell below the 68 mark for the first time since January 2017, closing at 68.07 level. The currency opened lower by 17 paise at 67.68 per dollar today against previous close of 67.51.

    Jaikishan J Parmar, research analyst at Angel Broking said, "There was no doubt about who is the winner in the Karnataka Elections. The assembly elections saw the return of the BJP as the single-largest party. In a way, the state of Karnataka maintained its 35 year old track record of voting out incumbent governments in each of the elections. But there may just about be a new twist to the Karnataka story. For Gowda, it would be a win-win situation as he would be able to officially pass on the baton to his son without compromising on his core vote bank. The Congress, even while accepting the anti-incumbency vote, will score a moral victory by keeping the BJP out of power in Karnataka. Of course, the final call will be on the governor after the final tally is out and the claimants are able to meet the governor of Karnataka. The situation becomes all the more interesting because the BJP with 30 seats more than the Congress had a lower vote share compared to the Congress. Quite obviously, the stock markets had sensed this kind of a possibility as the Nifty almost gave up most of its early morning euphoria. But the real outcome of the elections will only be visible in the next few days when the parties are able to hold their lot together and take a shot at the Karnataka Assembly."

    Tata Steel (2.29%), PowerGrid (2.27%) and IndusInd Bank (1.54%) were the top Sensex gainers. Tata Motors (4.29%), Coal India (2.11%) and SBI (1.87%) were the top Sensex losers.

    While midcap stocks index fell 0.81% or 131 points on BSE, small cap stocks index fell 0.65% or 114 points.  

    VK Sharma, head private client group and capital market strategy at HDFC Securities said, "While the Nifty closed just 5 points down at 10,802, the gloom was high as the BJP gave up its intraday majority mark with just 104 leads at the time of market close. The PSU bank index and the real estate index were the worst decliners. Though the BJP dramatically improved its performance from the last elections, reports that the Congress was ready to provide support to the JDS led the indices lower. It's an event that is now out of the way. The markets will now be more reactive to the international cues, which are a matter of concern specially the rising crude and dollar."

    Market breadth was negative with 1025 stocks ending higher against 1615 stocks closing lower on BSE. 139 stocks were unchanged.

    Earlier in the day, the Sensex rose over 400 points and Nifty hit 10,900 for the first time since February 2, 2018 amid the early trends of the results of Karnataka assembly elections showing BJP leading gains in the Congress-ruled state.

    But as PM Narendra Modi-led party faltered ahead of the halfway mark, benchmark indices turned volatile and fell into negative territory. While the Sensex fell 451 points from the intra day high of 35,993, the Nifty was down 128 points from the intra day high of 10,929 level.

    In early seconds of trade today, the Sensex rose 8 points or 0.02% to 35,565 and the Nifty fell 2.30 points to 10,804 signalling a flat opening for the market.

    On Monday, the Sensex closed about 21 points higher after early gains were erased due to a sell-off by participants ahead of the outcome of Karnataka assembly elections. The broader 50-issue NSE Nifty edged up just 0.10 points to close at 10,806, after shuttling between 10,834 and 10,774.

    Global markets  

    Global shares were mixed on Tuesday amid continuing uncertainty over trade tensions between China and the US. Investors were watching for US retail sales data, due later in the day, for further clues on the health of the world's biggest economy.

    France's CAC 40 inched up 0.2 percent to 5,548, while Britain's FTSE 100 rose by the same rate to 7,726. Germany's DAX gained only 0.1 percent to 12,991 after new data showed the country's economy slowed in the first quarter. US shares were set to drift slightly lower, with Dow futures down 0.4 percent and S&P 500 futures 0.3 percent lower.

    Japan's benchmark Nikkei 225 edged down 0.2 percent to 22,818.02. Australia's S&P/ASX 200 lost 0.6 percent to 6,097.80. South Korea's Kospi slipped 0.7 percent to 2,458.54 while Hong Kong's Hang Seng dropped 1.2 percent to 31,152.03. The Shanghai Composite climbed 0.6 percent to 3,192.12.

    Benchmark US crude oil gained 59 cents to $71.55 a barrel in electronic trading on the New York Mercantile Exchange. It rose 26 cents to $70.96 a barrel in New York on Monday. Brent crude, used to price international oil, gained 77 cents to $79.00 a barrel in London.

Jet Airways begins UDAN flights, offers fares starting Rs 967
  • Jet Airways that announced the commencement of its UDAN flights from June 14 yesterday, is now offering budget fares starting as low as Rs 967. The airlines announced yesterday that the first of its UDAN flights, the government's regional connectivity scheme, would be operated between Lucknow-Allahabad-Patna.  

    Jet Airways had bagged four routes in the second round of bidding in January where a total of 325 routes were awarded to various operators. Besides, Lucknow-Allahabad-Patna, Jet Airways will operate its UDAN flights on New Delhi-Nashik, Nagpur-Allahabad-Indore and Lucknow-Bareilly-Delhi routes.

    The fares for the Lucknow-Allahabad-Patna flight under the Udan scheme will be Rs 967, while the flights on the Patna-Allahabad-Patna route will cost Rs 1,216, Jet Airways said in a release today.

    Similarly, the ticket price for a trip on the Nagpur-Allahabad-Nagpur route has been pegged at Rs 1,690, while the Indore-Allahabad-Indore flight will cost Rs 1,914, the release added. Fare for a Delhi-Nashik-Delhi flight will be Rs 2,665, the release mentioned.

    At least half of the seats in the UDAN flights are offered at subsidised rates. The participating carriers get a certain amount of viability gap funding (VGF) that is shared between the Centre and the particular state. To fund the scheme, the civil aviation ministry is collecting a levy of Rs 5,000 per departure from airlines operating in major routes, including Mumbai and Delhi.

    The government had in March 2017 awarded 128 regional routes to five airlines for launching flights under the Udan (Ude Desh Ka Aam Naagrik) scheme, which aims at boosting air connectivity to the hinterland.

    Under the scheme, the fares have been kept at Rs 2,500 for a one-hour journey.

    General Awareness

    Strategic Petroleum Reserve (SPR) Programme
    • Context: Abu Dhabi National Oil Company (ADNOC) has shipped the first oil cargo for India’s strategic petroleum reserve at Mangalore.

      Background:

      Indian Strategic Petroleum Reserves Ltd (ISPRL) had then signed an agreement with ADNOC which allows the firm to store 5.86 million barrels of crude in the strategic facility at Mangalore at its own cost.
      India can use the entire available crude oil stored by ADNOC in the Mangalore facility during an emergency situation. The Agreement with ISPRL also allows ADNOC to sell part of the crude oil to Indian refineries on commercial basis while adhering to mutually agreed minimum crude storage which is for the exclusive use of the Indian government.

      About SPR programme:

      To ensure energy security, the Government of India had decided to set up 5 million metric tons (MMT) of strategic crude oil storages at three locations namely, Visakhapatnam, Mangalore and Padur (near Udupi). These strategic storages would be in addition to the existing storages of crude oil and petroleum products with the oil companies and would serve as a cushion during any external supply disruptions.
      In the 2017-18 budget, it was announced that two more such caverns will be set up Chandikhole in Jajpur district of Odisha and Bikaner in Rajasthan as part of the second phase.
      The construction of the Strategic Crude Oil Storage facilities is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a Special Purpose Vehicle, which is a wholly owned subsidiary of Oil Industry Development Board (OIDB) under the Ministry of Petroleum & Natural Gas.

      Need for strategic oil reserves:

      In 1990, as the Gulf war engulfed West Asia, India was in the throes of a major energy crisis. By all accounts India’s oil reserves at the time were adequate for only three days. While India managed to avert the crisis then, the threat of energy disruption continues to present a real danger even today.
      It is unlikely that India’s energy needs will dramatically move away from fossil fuels in the near future. Over 80% of these fuels come from imports, a majority of which is sourced from West Asia. This is a major strategic risk and poses a massive financial drain for an embattled economy and its growing current account deficit.
      To address energy insecurity, the Atal Bihari Vajpayee government mooted the concept of strategic petroleum reserves in 1998. Today, with India consuming upwards of four million barrels of crude every day (January 2015 figures), the case for creating such reserves grows stronger.

      Facts for Prelims:

      In January 2016, India signed a deal with the United Arab Emirates that allows the Gulf OPEC country to fill half of the underground crude oil storage facility of ISPRL at Mangalore. Therefore, the UAE’s Abu Dhabi National Oil Company will store about 6 million barrels of oil at Mangalore.

      What’s important?

      For Prelims: India’s strategic oil reserves- locations, ISPRL.
      For Mains: Energy security, need for SPR.

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