RRR-RRR for Circular Economy

Ever since, the United Nations General Assembly set the Sustainable Development Goals (SDGs) in 2015 and intended to achieve them by 2030, the efforts toward a circular economy both in totality and in individual sector and country, has caught momentum. The Sustainable Development Goals are a collection of 17 interlinked global goals designed to be a blueprint to achieve a better and more sustainable future for all by 2030.

In circular economy, 6Rs – reduce, reuse, recycle, recover, redesign and remanufacture are followed. In this way this concept strives to minimize the consumption of natural resources by reusing waste back into the production cycle to produce new products and uses, instead of wasting such materials. In such an economy, all forms of waste return to the economy and are used more efficiently and repeatedly.

Inspired by the UN’s commitment, various national and international agencies are making good headway towards achieving the goals of the circular economy. For example, UNCTAD’s work on the circular economy started in 2015 itself like activities on tackling fossil fuel. Multilateral organizations encourage discussions and activities around this concept by seeking to bring value out of the waste. They also promote collaborative economic activities, innovative business models, consumer awareness and intended behavioural shifts.

A circular economy also entails a market that gives incentives to reusing products, rather than scrapping them, which provides a way to not only protect the environment, but also use natural resources more judiciously, develop new sectors & new capabilities with newer technologies and create jobs. With 45% of global greenhouse gas emitting from manufacturing cars, clothes, food and other products being used daily, the circular economy has huge potential to reduce greenhouse emissions and mitigate the climate crisis, which is fast engulfing the globe and causing severe food crisis in over 20 countries.

India is also working vigorously on this concept with an estimation that its policy could bring in annual benefits of 40 lakh crores in 2050, besides reducing the greenhouse emission by 44% along with significant reduction in congestion and pollution, which would significantly contribute to health and economic benefits also. The Centre is actively formulating policies and promoting projects that are leveraging advanced IT and OT solutions to drive the country towards a circular economy system in critical areas like electricity from recyclable resources, waste management and others. Majority of the countries across the globe are also working on this model of economic development. For example, UAE has very recently approved 22 policies aimed to accelerate the country’s transition towards a circular economy.

Owing to devastating consequences of climate change, the concept of sustainable development has gained much traction among governments, policymakers, economists, environmentalists and business people in recent years. The circular economy has borne out of this concept only, which refers to a model of production and consumption and involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as they are possible. By raising the life cycle of products, this economic concept implies reducing waste to a minimum, thereby protecting the fast degrading environment. This concept does have rich prospects of creating wealth worth trillions of dollars besides generating jobs for millions. According to the Global Commission on Economy and Climate, adopting circular economy principles could deliver 26 trillion dollar in economic benefits by 2030.

India, Indian Ocean and Blue Revolution

India’s role in the Indian Ocean Region is now increasingly been seen as that of a protector internationally. As India looks to counter growing Chinese influence, the urgency of completing construction of new aircraft carriers and attack submarines, modernizing India’s naval assets, and improving its maritime domain awareness capabilities occupy center stage. India recently launched its ambitious First manned ocean Mission ‘Samudrayan’, for which, a deep-submergence vehicle called Matsya 6000 is being indigenously developed in the country. With the launch of this Unique Ocean Mission, India joins the elite club of nations such as the USA, Russia, Japan, France, and China to have such underwater vehicles for carrying out subsea activities. Not only has this opened a new chapter for India to explore ocean resources for drinking water, clean energy, but it has also marked India as one of the leading crusaders of Blue economy.

In 2015, India had initiated the very ambitious Sagarmala project, which the Cabinet approved to promote port-led development in India. The project, which aims to harness economic potentiial out of the country’s 7500 km long coastline, had been rolled out for boosting infrastructure for transporting goods to and from ports quickly, efficiently, and cost-effectively. Establishing a robust maritime infrastructure and strong maritime strategy requires massive integration of national inland waterways, road and railway corridors, creation of special economic zones, well-planned industrial and logistics park, dedicated freight corridors project, etc. all of which are either at prep stage or already functioning in the country. Announcement of Gati Shakti also forms a major part of this full scale integration. Various other efforts in this direction in last 7-8 years include the agreement on maritime shipping and passenger & cruise shipping with neighbouring Bangladesh, pact with Sri Lanka on a maritime rescue centre, MoU with Spain on Cooperation in Port matters, with UAE on Institutional Cooperation on Maritime Transport, and various other maritime-related agreements with Netherlands, South Korea, Austria, etc. Re-Drawal of the High Risk Area in the Indian Ocean was a major gain for India on Global Maritime Stage in 2015, when the International bodies had agreed to India’s efforts to push back the High Risk Area (HRA) from 78 degrees East longitude to the 65 degrees East longitude.

India has abundant natural resources in the form it 7516 km long and rich coastline, a strategic location just above the Indian Ocean, Lakshwadweep and Andaman & Nicobar Islands as Union Territories further into the high waters, all providing it with unprecedented opportunities to use all these resources to take its economic growth to new highs and simultaneously become an influential stakeholder in the Indian Ocean region (IOR). When the NDA government assumed power in 2014, enhancing maritime power and infrastructure was one of the most urgent projects to take up. Changing its policy from ‘Look East’ to a stronger stance of ‘Act East’ formed a part of India’s commitment to strengthen and focus more on its Asia-Pacific connects, especially keeping the ASEAN countries at the centre of all the strategic and diplomatic decisions. A lot of it is rooted in the fact that these South Asian countries form a good block for India in terms of total trade, increasing export, attracting investments. These countries become even more important due to their proximity to the South China Sea, the Indian Ocean, and important straits that are used as trade routes like the Strait of Malacca. Some of these nations also possess small island territories and ports at strategic locations, which become significant in terms of maritime security and partnerships. Similarly, in the West, with active operationalisation and usage of the Chabahar in the West, a model is now in place as India has been able to look after both business and strategic ties.

India has also been actively able to augment its sea stakes and showcase its maritime interests through active naval diplomacy, vocal advocacy of sea affairs and the need of strengthening maritime positioning by Prime Minister Modi at various International forums, strong naval decision and joint exercises, humanitarian and anti-piracy cooperation, etc. He has spelt out his vision, “To me the Blue Wheel or Chakra in our national flag represents the potential of the Blue Revolution or the Ocean Economy. That is how central the ocean economy is to us.” Indian Naval Ships and aircraft are regularly deployed on Mission-Based Deployments in Indian Ocean Region to enhance maritime security. It also undertakes surveillance to enhance Maritime Domain Awareness and address contingencies that may arise. The 2021 launch of ‘The Maritime India Vision (MIV) 2030 will also play a major role in massively increasing India’s visibility in the international maritime sector, and strengthening maritime relations with different countries.

Alarming situation of Global Food Availability

The ongoing Ukraine-Russia conflict, restricting the food exports from these countries besides giving a sharp rise to inflation, has worsened the already nagging food crisis in dozens of developing countries of the world. The situation has pushed the Food and Agriculture Organization’s ‘Food Price Index’ to an all-time high since the index began in 1990. According to the recent ‘2022 Global Report on Food Crises’, hunger levels had surpassed all previous records in 2021 itself, throwing around 19.3 crore people in acute food insecurity with Ukraine conflict, disrupted supply chains, Covid-19 pandemic, climate change, social and political unrests and instability and pests being the main drivers. The World Food Programme (WFP) and the Food and Agriculture Organization of the United Nations (FAO) have further warned that this acute food crisis could worsen during June, 2022 to September, 2022 in 20 countries or so.

Recent surveys by the World Bank in 83 countries are equally alarming, which suggest a significant number of people are running out of food. These surveys also show that a good number of people are forced to reduce their food consumption and reduced calorie intake in the first two years of the Covid-19 pandemic, which also indicates to the worsening health crisis that could have lasting impacts on the cognitive development of lakhs of children globally.

Inflation continues to rise across the globe with majority of the countries experiencing high food prices. According to the World Banks’s April 2022 Commodity Markets Outlook, as on June 16, 2022, the global agricultural price index is 14% higher compared to January 2022 and maize and wheat prices are 27% and 37% higher respectively compared to January 2022. The Ukraine conflict has further altered global patterns of trade, production and consumptions of commodities that may keep prices at historically high levels through the year of 2024, exacerbating the food inflation and food crisis.

Rising food prices have a serious impact on especially the people belonging to low and middle income countries as they spend a significant part of their income on food than high rich countries. Higher prices of energy and fertilizers along with trade and supply disruptions owing to the shutting down of major ports, may further worsen the situations.

However, India appears to be in a comfortable position. In recent years, the present government at the Centre has brought into action several ground breaking measures and methods for faster and more inclusive growth of farmers. The measures including land reforms, soil testing, augmenting water availability, agriculture productivity, credit and insurance, food security, crop insurance and farmers competitiveness, which have resulted in augmented food production. India- the world’s second largest producer of the grain has had five consecutive years of record harvests of wheat till 2021. As per the second advance estimates for 2021-22, total Food-grains production in the country is estimated at record 316.06 million tones, which is higher by 5.32 million tonnes than the production of food-grain during 2020-21.

EU tastes UPI

The 16th-century economy experienced the most remarkable changes perhaps in the field of Global banking and finance. Through letters of exchange drawn on the various bourses that were growing throughout Europe, bankers were able to mobilize capital in fabulous amounts. This way, the otherwise resource-starving economies of Europe were able to setup global empires due to innovations and advancements in banking. This led to exponential growth of western European economies even in modern times after WW II. Similar bright fate was expected even in the ‘now prevalent’ digital era. To be fair, these economies have been doing well but India seems to have leapfrogged in adopting digital economy, especially under the leadership of Indian Prime Minister Narendra Modi and his drive for Digital India.

Recent data has revealed that in May 2022, UPI recorded transactions worth Rs. Rs 10.4 lakh cr. The growth has been so tremendous that within just the first five months of 2022, the platform has crossed almost 80% of transaction volume of 2021. And as UPI makes entry in to the European Union Market, it will further log phenomenal growth. EU’s acceptance to UPI as a legitimate payments mode has paved a way for India to explore similar opportunities in many other nations across the globe. The expansion is inevitable because of the agility, reliability and instant ease that UPI can provide. Apart from EU, UPI Global is already live in Nepal, UAE, Singapore and Bhutan, while the NPCI International is also in talks to extend UPI services in the United States and Western Asia.

Another fact worth taking note of is that before the indigenously-developed UPI payments method, the country had high dependence on foreign payments platforms. Such a reliance on foreign platforms always resulted in a significant amount of money going out of the country. UPI has reversed this unprecedentedly. The success of UPI lies in its flexibility as it offers users to pay through easy QR codes and quick PINs, while the world still struggles and stays on traditional methods, such as card systems, which are still dominant in developed states across the globe. Cheque payments are still very common in various parts of the European countries. UPI is simple and doesn’t require users to carry anything extra other than their smartphones. RuPay and UPI, together are beating cash and card-based transactions in the country with whopping margins. The continuation of this trend may lead to them taking over the global competitors like American express, VISA and Mastercard, and other Global Giants that have ruled the Indian payment systems for decades. UPI is becoming popular in other foreign countries at a right time, as absence of a similar Open, Simple & Powerful payments interface may leverage India’s position in the foreign markets.

In order take digital payment to every nook and corner of the country, various steps have been taken by MeitY. Incentive schemes like the promotion of RuPay Debit cards and low-value BHIM-UPI transactions (P2M) facilitate Banks in building a robust digital payment ecosystem. Additionally, Incentive/cashback schemes were launched by MeitY for changing the customer/merchant behavior for faster adoption of digital payments in India. Some of them were BHIM Cashback schemes for Individuals & Merchants, BHIM Aadhaar Merchant Incentive Scheme, BHIM-UPI Merchant Onboarding Scheme Merchant Discount Rate (MDR), etc. Another step towards improving digital infrastructure was the scheme titled “Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA)” to usher in digital literacy in rural India. Concept of QR scanning for making digital payments has also contributed in increasing the number of digital payments because of the added ease and flexibility.