Note4Students
From UPSC perspective, the following things are important :
Prelims level: Kisan Suryodaya Yojana
Mains level: Not Much
PM has launched the ‘Kisan Suryodaya Yojana’ aimed at providing day-time electricity to farmers in the State of Gujarat for irrigation and farming purposes.
Try this question from CSP 2017:
Q. The term ‘Domestic Content Requirement’ is sometimes seen in the news with reference to-
(a) Developing solar power production in our country
(b) Granting licences to foreign T.V. channels in our country
(c) Exporting our food products to other countries
(d) Permitting foreign educational institutions to set up their campuses in our country
Kisan Suryodaya Yojana
- Under the scheme, farmers will be able to avail power supply from 5am to 9pm for irrigation purposes.
- Around 234 transmission lines are to be installed under the scheme. Each line is to carry the power of 66 KW. They are to be erected to a total length of 3,490 km.
- Dahod, Patan, Mahisagar, Panchmahal, Chhota Udepur, Kheda, Tapi, Valsad, Anand and Gir-Somnath have been included under the Scheme for 2020-21.
- The remaining districts will be covered in a phase-wise manner by 2022-23.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Superconductivity
Mains level: Not Much
A study has shown that a new material superconducts at 15 degrees Celsius but at extremely high pressure.
In India, we often get to hear about the transmission losses in DISCOMS. Such losses can be zeroed with the application of superconducting cables (which is practically impossible unless we find a normal working one). The phenomena, superconductivity, however, is not new to us, UPSC may end up asking some tricky statements in the prelims regarding it.
What is Superconductivity?
- A superconductor is a material, such as a pure metal like aluminium or lead, that when cooled to ultra-low temperatures allows electricity to move through it with absolutely zero resistance.
- Kamerlingh Onnes was the first scientist who figured out exactly how superconductor works in 1911.
- Simply put, superconductivity occurs when two electrons bind together at low temperatures.
- They form the building block of superconductors, the Cooper pair.
- This holds true even for a potential superconductor like lead when it is above a certain temperature.
What is the new material?
- A new material composed of carbon, hydrogen and sulphur superconducts at 15 degrees Celsius.
- However, it needs ultrahigh pressure of about 2 million atmospheres to achieve this transition, putting off any thoughts of application to the future.
- The pressure they needed was 267 Gigapascals (GPa), or 2.6 million atmospheres.
- The pressure at the centre of the Earth is 360 GPa, so it is 75% of the pressure at the centre of the Earth.
What are Superconductors?
- Superconductors are materials that address this problem by allowing energy to flow efficiently through them without generating unwanted heat.
- They have great potential and many cost-effective applications.
- They operate magnetically levitated trains, generate magnetic fields for MRI machines and recently have been used to build quantum computers, though a fully operating one does not yet exist.
Issues with superconductors
- They have an essential problem when it comes to other practical applications: They operate at ultra-low temperatures.
- There are no room-temperature superconductors. That “room-temperature” part is what scientists have been working on for more than a century.
- The amount of energy needed to cool a material down to its superconducting state is too expensive for daily applications.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: IVC
Mains level: Dairy production in IVC
A new study has shown that dairy products were being produced by the Harappans as far back as 2500 BCE.
Try this PYQ:
Q.Which one of the following is not a Harappan site?
(a) Chanhudaro
(b) Kot Diji
(c) Sohgaura
(d) Desalpur
Dairy production in IVC
- By analysing residues on ancient pots, researchers show the earliest direct evidence of dairy product processing, thus throwing fresh light on the rural economy of the civilization.
- The studies were carried out on 59 shards of pottery from Kotada Bhadli, a small archaeological site in present-day Gujarat.
How did they find it?
- The team used molecular analysis techniques to study the residues from ancient pottery.
- Pots are porous. The pot preserves the molecules of food such as fats and proteins. Using techniques like C16 and C18 analysis we can identify the source of lipids.
- Traces were seen in cooking vessels indicating that milk may have been boiled and consumed.
Significant outcome of the study
- The study has found residues in a bowl showing that either heated milk or curd could have been served.
- There are also remains of a perforated vessel, and similar vessels were used in Europe to make cheese.
- The Harappans did not just use dairy for their household.
- The large herd indicates that milk was produced in surplus so that it could be exchanged and there could have been some kind of trade between settlements.
- This could have given rise to an industrial level of dairy exploitation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Yellow dust
Mains level: Air pollution
North Korean authorities have urged citizens to remain indoors to avoid contact with a mysterious cloud of ‘yellow dust’ blowing in from China, which they have warned could bring Covid-19 with it.
Try this PYQ:
Q.Consider the following
- Birds
- Dustblowing
- Rain
- Windblowing
Which of the above spread plant diseases?
(a) 1 and 3 only
(b) 3 and 4 only
(c) 1, 2 and 4 only
(d) 1, 2, 3 and 4
What is yellow dust?
- Yellow dust is actually sand from deserts in China and Mongolia that high-speed surface winds carry into both North and South Korea during specific periods every year.
- The sand particles tend to mix with other toxic substances such as industrial pollutants, as a result of which the ‘yellow dust’ is known to cause a number of respiratory ailments.
- Usually, when the dust reaches unhealthy levels in the atmosphere, authorities urge people to remain indoors and limit physical activity, particularly heavy exercise and sport.
- Sometimes, when the concentration of yellow dust in the atmosphere crosses around 800 micrograms/cubic meter, schools are shut and outdoor events cancelled in the affected areas.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Himalayan Brown Bear
Mains level: Not Much
A recent study has predicted massive habitat decline for the Himalayan brown bear (Ursus arctos isabellinus) by 2050 due to climate change.
Try this PYQ:
Q. The Himalayan Range is very rich in species diversity. Which one among the following is the most appropriate reason for this phenomenon?
(a) It has a high rainfall that supports luxuriant vegetative growth.
(b) It is a confluence of different bio-geographical zones.
(c) Exotic and invasive species have not been invasive species have not been introduced in this region.
(d) It has less human interference.
Himalayan Brown Bear
- The Himalayan brown bear is one of the largest carnivores in the highlands of Himalayas.
- It occupies the higher reaches of the Himalayas in remote, mountainous areas of Pakistan and India, in small and isolated populations, and is extremely rare in many of its ranges.
- While the brown bear as a species is classified as Least Concern by the IUCN, this subspecies is highly endangered and populations are dwindling.
- It is ‘Endangered’ in the Himalayas and Critically Endangered in the Hindu Kush.
What did the study say?
- The study carried out in the western Himalayas by scientists of Zoological Survey of India, predicted a massive decline of about 73% of the bear’s habitat by the year 2050.
- These losses in habitat will also result in loss of habitat from 13 protected areas (PAs), and eight of them will become completely uninhabitable by the year 2050, followed by loss of connectivity in the majority of PAs.
- The study highlights for the need to adopt preemptive spatial planning of PAs in the Himalayan region for the long-term viability of the species.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Malabar Exercise, Quad
Mains level: Paper 2- Defining the roles and relations between Malabar and the Quad
While highlighting the importance of navy for India, the article examines the need to define the role and relation between the Quad and Malabar.
The salience of navy for India
- It took confrontation in the Himalayas to bring focus on India’s maritime domain clearly indicates that the salience of maritime power is not yet understood in India.
- On its northern and western fronts, India faces a formidable challenge and can at best hope for stalemate due to two factors :
- 1) Economic, military and technological asymmetry between China and India.
- 2) Active China-Pakistan nexus.
- Attention has, therefore, been focused on the maritime domain, where it is believed that India may have some cards to play.
- While preparing to fight its own battles with determination, it is time for India to seek external balancing (read Quad) — best done via the maritime domain.
Evolution of Malabar Exercise
- Above is the backdrop against which one must see the progressive evolution of Exercise “Malabar”,
- At beginning, it was a bilateral event involving just the Indian and US navies.
- It became tri-lateral with the inclusion of Japan in 2015.
- And now it has transformed into a four-cornered naval drill that will also include Australia.
- Apart from its geo-political significance for the Indo-Pacific, this development poses two conundrums.
- Firstly, given the same composition, what is the distinction, now, between “Malabar” and the “Quad”?
- Secondly, does Malabar 2020 mark the release of Australia from China’s thralldom?
Defining the roles and relation betwee Malabar and Quad
- The Quadrilateral Security Dialogue or Quad has its roots in the Core Group of four senior diplomats representing the US, India, Japan and Australia.
- The group was formed to coordinate relief efforts after the Great Asian Tsunami of December 26, 2004.
- The present Quad has obviously retained this tradition and its members have neither created a charter nor invested it with any substance.
- The Quad is 16 years old now, and Malabar 28.
- Both have served a useful purpose, and a reappraisal of the roles and relationship of the Quad-Malabar concepts is, therefore, overdue.
- Since it is India which faces a “clear and present danger”, it should boldly take the initiative to do so.
Need for the Indo-Pacific Concord
- In order to rein in China’s hegemonic urges, there is need for affected nations to come together to show their solidarity and determination in a common cause.
- In this context, there is need to create a broad-based “Indo-Pacific Concord”, of like-minded regional democracies.
- This should be an organisation with a maritime security charter, which has no offensive or provocative connotations.
- Using the Quad and Malabar templates, a shore-based secretariat can be established in a central location like Port Blair, in the Andaman Islands, which would schedule and conduct periodic multinational naval exercises.
- The exercises could be structured to hone the skills of participating navies in specialisations like humanitarian assistance and disaster relief, countering non-traditional threats, undertaking search-and-rescue operations and establishing networked maritime domain awareness.
- The Concord could also designate forces to uphold maritime security or “good order at sea”.
What Australia joining Quad means
- The prospect of Australia belatedly joining the Quad is expected to reinforce the Quad and enhance its credibility.
- But there are reasons for India to be circumspect it.
- Memories are still alive of its past political ambivalence towards India, its criticism of our naval expansion and its vociferous condemnation of the 1998 nuclear tests.
- Nor should one overlook Beijing’s recent influence on Australia’s foreign policy.
- This influence on Australia’s foreing policy caused it to flip-flop over the sale of uranium to India as well as its peremptory withdrawal from the Quad in 2008.
Implications of singing of BECA with the U.S.
- India signing the BECA (Basic Exchange and Cooperation Agreement) with the US last of the four “foundational agreements” would enhance interoperability between the respective militaries.
- However, there is need to pay heed to two valid concerns:
- 1) Regarding the possible compromise of information impinging on India’s security.
- 2) Whether these agreements will barter away the last vestiges of India’s strategic autonomy.
Consider the question “The changing geopolitical equations has necessitated the formation of Indo-Pacific Concord by the democracies of the region.” In light of this, elaborate on India’s role in Quad and its implications for the region”
Conclusion
Indians, given our history, should never lose sight of the truism in international relations, that it is the unerring pursuit of national interests that guides the actions and policies of every nation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: https://www.thehindu.com/opinion/lead/indias-un-journey-from-outlier-to-the-high-table/article32932905.ece
Mains level: Paper 2- India's journey at United Nations
The article examines India’s journey at the UN as it enters it 75year. It also analyses the challenges India faced at the UN and tracks India’s transformation from being an outlier to the high table.
Three phases of India’s presence at the UN
- Seven and a half decades of India at the UN may be viewed with reference to roughly three distinct phases.
First phase: From independence to 1989
- The first phase lasted until the end of Cold War in 1989.
- During this phase, India had learnt to explore and enhance its diplomatic influence in easing armed conflicts in Asia and Africa by disentangling them from the superpower rivalry.
- India also leaned that the UN could not be relied upon to impartially resolve vital security disputes such as Jammu and Kashmir.
- India strove to utilise the UN only to focus on common causes such as anti-colonialism, anti-racism, nuclear disarmament, environment conservation and equitable economic development.
- India seemed to claim the moral high ground by proposing, in 1988 three-phase plan to eliminate nuclear weapons from the surface of earth.
- But it resisted attempts by neighbouring countries to raise bilateral problems.
- Defeat in 1962 war against China meant a definitive redesign of the country’s diplomatic style to privilege bilateral contacts over the third party role by the UN.
Second phase: 1990s
- The 1990s were the most difficult decade for India in the UN.
- The 1990s were marked by the sudden end of the Cold War, the disintegration of the Soviet Union and the emergence of the United States as the unrivalled power.
- Besides, the uncertain political climate along with the balance of payments crisis constrained the country’s capability to be active in various bodies, especially in the Security Council (UNSC) and the General Assembly.
- There was a change in India’s foreign policy: At the UN as India showed pragmatism in enabling the toughest terms on Iraq even after Gulf War or in reversing position on Zionism as racism.
- At the same time, growing militancy in Kashmir in the early 1990s helped Pakistan to internationalise the dispute with accusations about gross human rights violations by India.
- India to seek favours from Iran and China in the Human Rights Commission to checkmate Pakistan.
- The violation of the sovereignty principle by NATO intervention against Yugoslavia in 1999 without the authorisation of the UNSC deeply disturbed India.
- At the same time call for an end to aerial attacks on Yugoslavia did not garner much support in the UNSC.
- India’s diplomatic difficulties was exposed when it suffered a defeat in the hands of Japan in the 1996 contest for a non-permanent seat in the UNSC.
- India resolutely stood against indefinite extension of the Non-Proliferation Treaty in 1995.
- India strongly rejected the backdoor introduction for adoption of the Comprehensive Test Ban Treaty in 1996.
- It is against this background that India surprised the world in 1998 with its Pokhran nuclear weapon tests, ignoring the likely adverse reaction from the nuclear club.
Third phase: Rise in influence in 21st century
- The impressive economic performance in the first decade of the 21st century due to economic liberalisation and globalisation policies, helped a great deal in strengthening profile.
- This is only aided by its reliable and substantial troop contributions to several peacekeeping operations in African conflict theatres.
- India has emerged as a responsible stakeholder in non-traditional security issue areas such as the spread of small and light weapons, the threat of non-state actors acquiring weapons of mass destruction, and the impact of climate change.
- India has scaled up its contributions to development and humanitarian agencies, while India’s share to the UN assessed budget has registered a hike from 0.34% to 0.83%.
- India’s successful electoral contests for various prestigious slots in the UNSC, the Human Rights Council, the World Court, and functional commissions of the Economic and Social Council indicates its growing popularity
Major unsuccessful initiatives by India
- Two major initiatives India has heavily invested in are stuck:
- 1) The draft Comprehensive Convention on International Terrorism it drafted and revised with the hope of helping consensus.
- It encountered reservations on provisions regarding definition of terrorist and the convention’s application to state armed forces.
- 2) Second is the question of equitable expansion of the UNSC to enable India to attain permanent membership along with other claimants from Asia, Africa and Latin America.
- The move has been stuck for more than 25 years because of a lack of unity among the regional formations.
- It also includes opposition from some 30 middle powers such as Italy and Pakistan which fear losing out to regional rivals in the event of an addition of permanent seats.
- The only realistic possibility seems to settle for a compromise, i.e. a new category of members elected for a longer duration than the present non-permanent members without veto power.
Priorities at the UNSC as a non-permanent member
- India’s future role will depend on its ability to deal economic slowdown and a troubled relationship with China.
- This is pertinent as India will soon begin its two-year term as a non-permanent UNSC member (January 1, 2021).
- Its areas of priority will continue to be the upholding of Charter principles, act against those who support, finance and sponsor terrorists, besides striving for securing due say to the troop contributing countries in the management of peace operations.
- It is reasonable to assume (based on earlier patterns) that India will work for and join in consensus on key questions wherever possible.
- But it may opt to abstain along with other members including one or two permanent members.
Consider the question “Elaborate on the transformation in India’s role at UN. What are the challenges India may face as a non-permanent member of the UNSC”
Conclusion
As a non-permanent UNSC member now, India needs to uphold the Charter principles in the backdrop of a turbulent world.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CPI, WPI, Base Year
Mains level: Inflation management
The Labour and Employment Ministry has revised the base year of the Consumer Price Index (CPI) for Industrial Workers (CPI-IW) from 2001 to 2016.
Why such a move?
- This revision reflects the changing consumption pattern, giving more weightage to spending on health, education, recreation and other miscellaneous expenses while reducing the weight of food and beverages.
What is the Consumer Price Index (CPI)?
- The CPI is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.
- It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. Changes in the CPI are used to assess price changes associated with the cost of living.
- The CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.
- Essentially it attempts to quantify the aggregate price level in an economy and thus measure the purchasing power of a country’s unit of currency.
Types of CPI in India
- CPI in India comprises multiple series classified based on different economic groups.
- There are four series, viz the CPI UNME (Urban Non-Manual Employee), CPI AL (Agricultural Labourer), CPI RL (Rural Labourer) and CPI IW (Industrial Worker).
- While the CPI UNME series is published by the Central Statistical Organisation, the others are published by the Department of Labour.
- From February 2011 the CPI (UNME) released by CSO is replaced as CPI (urban), CPI (rural) and CPI (combined).
How it is different from WPI?
- CPI is different from WPI, or Wholesale Price Index, which measures inflation at the wholesale level.
- While WPI keeps track of the wholesale price of goods, the CPI measures the average price that households pay for a basket of different goods and services.
- WPI measures and tracks the changes in the price of goods before they reach consumers; goods that are sold in bulk and traded between entities or businesses (rather than consumers).
- Even as the WPI is used as a key measure of inflation in some economies, the RBI no longer uses it for policy purposes, including setting repo rates.
- The central bank currently uses CPI or retail inflation as a key measure of inflation to set the monetary and credit policy.
Major components of WPI
- Primary articles are a major component of WPI, further subdivided into Food Articles and Non-Food Articles.
- Food Articles include items such as Cereals, Paddy, Wheat, Pulses, Vegetables, Fruits, Milk, Eggs, Meat & Fish, etc.
- Non-Food Articles include Oil Seeds, Minerals and Crude Petroleum
- The next major basket in WPI is Fuel & Power, which tracks price movements in Petrol, Diesel and LPG
- The biggest basket is Manufactured Goods. It spans across a variety of manufactured products such as Textiles, Apparels, Paper, Chemicals, Plastic, Cement, Metals, and more.
- Manufactured Goods basket also includes manufactured food products such as Sugar, Tobacco Products, Vegetable and Animal Oils, and Fats.
Note: WPI has a sub-index called WPI Food Index, which is a combination of the Food Articles from the Primary Articles basket, and the food products from the Manufactured Products basket.
Now try this PYQ from 2014 CSP:
Q.With reference to India, consider the following statements:
- The Wholesale Price Index (WPI) in India is available on a monthly basis only
- As compared to the Consumer Price Index for Industrial Workers (CPI (IW)), the WPI gives less weight to food articles.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Back2Basics: Base Year
- A base year is the first of a series of years in an economic or financial index. It is typically set to an arbitrary level of 100.
- Any year can serve as a base year, but analysts typically choose recent years. They are periodically revised to keep data current in a particular index.
- A base year is used for comparison in the measure of business activity or economic index.
- For example, to find the rate of inflation between 2013 and 2018, 2013 is the base year or the first year in the time set.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Components of forex reserves
Mains level: Not Much
India’s foreign exchange reserves touched a lifetime high of $555.12 billion, according to RBI data.
Aspirants must make a note here:
- Authority managing FOREX in India
- Components of FOREX
- IMF’s SDRs
- Emergency use of FOREX
What are Forex Reserves?
- Reserve Bank of India Act and the Foreign Exchange Management Act, 1999 set the legal provisions for governing the foreign exchange reserves.
- RBI accumulates foreign currency reserves by purchasing from authorized dealers in open market operations.
- The Forex reserves of India consist of below four categories:
- Foreign Currency Assets
- Gold
- Special Drawing Rights (SDRs)
- Reserve Tranche Position
- The IMF says official Forex reserves are held in support of a range of objectives like supporting and maintaining confidence in the policies for monetary and exchange rate management including the capacity to intervene in support of the national or union currency.
- It will also limit external vulnerability by maintaining foreign currency liquidity to absorb shocks during times of crisis or when access to borrowing is curtailed.
Where are India’s forex reserves kept?
- The RBI Act, 1934 provides the overarching legal framework for the deployment of reserves in different foreign currency assets and gold within the broad parameters of currencies, instruments, issuers and counterparties.
- As much as 64 per cent of the foreign currency reserves is held in the securities like Treasury bills of foreign countries, mainly the US.
- 28 per cent is deposited in foreign central banks and 7.4 per cent is also deposited in commercial banks abroad.
- In value terms, the share of gold in the total foreign exchange reserves increased from about 6.14 per cent as at end-September 2019 to about 6.40 per cent as at end-March 2020.
Try this PYQ:
Q. Gold tranche(Reserve tranche) refers to (CSP 2020)-
(a) A loan system of World bank
(b) One of the operations of a central bank
(c) A credit system of WTO granted to its members
(d) A credit system granted by IMF to its members
Rising above the 1991 crisis
- Unlike in 1991, when India had to pledge its gold reserves to stave off a major financial crisis, the country can now depend on its soaring Forex reserves to tackle any crisis on the economic front.
- The level of Forex reserves has steadily increased by 8,400 per cent from $5.8 billion as of March 1991 to the current level.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Vultures
Mains level: Not Much
Uttar Pradesh, Tripura, Maharashtra, Karnataka and Tamil Nadu will get a vulture conservation and breeding centre each, according to the Action Plan for Vulture Conservation 2020-2025.
Action Plan for Vulture Conservation
- The action plan was approved by the National Board for Wildlife (NBWL) October 5, 2020. An earlier one was formulated in 2006 for three years.
- The new plan has laid out strategies and actions to stem the decline in vulture population, especially of the three Gyps species:
- Oriental white-backed vulture (Gyps bengalensis)
- Slender-billed vulture (Gyps tenuirostris)
- Long-billed vulture (Gyps indicus)
Note: These three vulture species were listed by IUCN, in 2000 as ‘Critically Endangered’, which is the highest category of endangerment.
- This would be done through both ex-situ and in-situ conservation.
- The plan has also suggested that new veterinary non-steroidal anti-inflammatory drugs (NSAIDS) be tested on vultures before their commercial release. NSAIDS often poisons cattle whose carcasses the birds pray on.
Highlights of the new plan
- A system to automatically remove a drug from veterinary use if it is found to be toxic to vultures, with the help of the Drugs Controller General of India.
- Conservation breeding of red-Headed vultures and Egyptian vultures and the establishment at least one vulture-safe zone in each state for the conservation of the remnant populations in that state.
- Coordinated nation-wide vulture counting, involving forest departments, the Bombay Natural History Society, research institutes, non-profits and members of the public.
- A database on emerging threats to vulture conservation, including collision and electrocution, unintentional poisoning, etc.
Why protect vultures?
- Vultures are often overlooked and perceived as lowly scavengers, but they play a crucial role in the environments in which they live.
- The scavenging lifestyle that gives them a bad reputation is, in fact, that makes them so important for the environment, nature and society.
- Vultures, also known as nature’s cleanup crew, do the dirty work of cleaning up after death, helping to keep ecosystems healthy as they act as natural carcass recyclers.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ILO
Mains level: India and ILO
After 35 years, India has assumed the Chairmanship of the Governing Body of International Labour Organization (ILO).
Try this PYQ:
Q.The Partnership for Action on Green Economy (PAGE), a UN mechanism to assist countries transition towards a greener and more inclusive economies, emerged at:
(a) The Earth Summit on Sustainable Development 2002, Johannesburg
(b) The United Nations Conference on Sustainable Development 2012, Rio de Janeiro
(c) The United Nations Framework Convention on Climate Change 2015, Paris
(d) The World Sustainable Development Summit 2016, New Delhi
About the International Labour Organization
- The ILO is a UN agency whose mandate is to advance social and economic justice through setting international labour standards.
- Founded in 1919 under the League of Nations, it is the first and oldest specialised agency of the UN.
- The ILO has 187 member states: 186 out of 193 UN member states plus the Cook Islands.
- The ILO’s international labour standards are broadly aimed at ensuring accessible, productive, and sustainable work worldwide in conditions of freedom, equity, security and dignity.
About its Governing Body
- The Governing body is the apex executive body of the ILO which decides policies, programmes, agenda, budget and elects the Director-General.
- It meets three times a year, in March, June and November.
Significance for India
- India will be presiding over the upcoming meeting of the Governing Body to be held in November 2020.
- India would have the opportunity to interact with the senior officials and social partners of the member states.
- It will also provide a platform to apprise participants of the transformational initiatives taken by the Government in removing the rigidities of the labour market.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: CAATSA
Mains level: Paper 2- India-U.S. relations
Secretary of State, Mike Pompeo makes his way to India next week, exactly a week before the election. This article discusses the various aspects that could form the part of the discussion.
Difference in U.S’s and India’s position on Quad
- He has stated that meeting in India “would include discussions about how free nations can work together to thwart threats posed by the Chinese Communist Party”.
- Just a few weeks ago, at the Quad Foreign Ministers meeting, U.S. Secretary of State had called for collaboration to protect people and partners from the Chinese Communist Party’s exploitation, corruption, and coercion.
- In contrast, India has maintained that its membership of the Quad is aligned to its Indo-Pacific policy, and by no means directed against any country.
- While Chines aggression is changing India’s priorities, any shift in India’s position on the Quad at the U.S.’s prompting must also benefit India.
What should be the part of U.S.-India collaboration
- It is critical to study just how India hopes to collaborate with the U.S. on the challenge that Beijing poses on each of India’s three fronts: at the LAC, in the maritime sphere, and in the South Asian Association for Regional Cooperation (SAARC) region surrounding India.
- On the maritime sphere, discussions will include strengthening ties in the Indo-Pacific, enhancing joint military exercises like the ‘Malabar’ and completing the last of the “foundational agreements” with the Basic Exchange and Cooperation Agreement for Geospatial Cooperation (BECA).
- In Male, the U.S. has announced a defence agreement that will pave the way for a strategic dialogue.
- And unlike in the past, India has not objected this agreement with Male for entering in its area of influence in the Indian Ocean Region, as it will allow the U.S. to counter Chinese influence there.
- With Sri Lanka the U.S. is in discussions on infrastructure projects, and progress on its “Millenium Challenge Corporation” (MCC) offer of a five-year aid grant of about $480 million.
- At a time when India is delaying Sri Lanka’s requests for debt relief, given its own economic constraints, the U.S. aid offer will be seen as one way of staving off China’s inroads into Sri Lanka.
- Most important will be how the U.S. and India can collaborate on dealing with India’s most immediate, continental challenge from China: at the LAC.
- Apart from enhancing and expediting U.S. defence sales to India, there is must the U.S. could promise to India.
- The U.S. must also commit to keeping the pressure on Pakistan on terrorism, despite the U.S. need for Pakistan’s assistance in Afghan-Taliban talks.
- A firm U.S. statement in this regard may also disperse the pressure the Indian military faces in planning for a “two-front” conflict with China.
Resolving other key issues with the U.S.
- Resolution of Trade issues, an area the Trump administration has been particularly tough, and restoration of India’s Generalised System of Preferences status for exporters should also be priority.
- The government could press for more cooperation on 5G technology sharing, or an assurance that its S-400 missile system purchase from Russia will receive an exemption from CAATSA sanctions.
Conclusion
By inviting Secretary of State this close to the U.S. elections, New Delhi has taken a calculated and bold gamble, however, our leaders must drive a harder bargain to consolidate the pay-offs from the visit.
Back2Basics: What is CAATSA?
- The Countering America’s Adversaries Through Sanctions Act (CAATSA) is a U.S. federal law that imposes economic sanctions on Iran, Russia and North Korea.
- The bill came into effect on August 2, 2017, with the intention of countering perceived aggressions against the U.S. government by foreign powers.
- It accomplishes this goal by preventing U.S. companies from doing business with sanctioned entities.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Cereals producer states in India
Mains level: Paper 3- Encouraging cereals production in India to deal with the health issue
Promotion of millet crops serves the dual purpose of securing health and supporting farmers. This article explains the strategy adopted by the government to achieve the same.
Millet crops in India
- The three major millet crops currently growing in India are jowar (sorghum), bajra (pearl millet) and ragi (finger millet).
- India also grows a rich array of bio-genetically diverse and indigenous varieties of “small millets” like kodo, kutki, chenna and sanwa.
- Major producers include Rajasthan, Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Maharashtra, Gujarat and Haryana.
Advantages of millet cultivation
- Millets are good for the soil, have shorter cultivation cycles and require less cost-intensive cultivation.
- These unique features make millets suited for and resilient to India’s varied agro-climatic conditions.
- Millets are not water or input-intensive, making them a sustainable strategy for addressing climate change and building resilient agri-food systems.
Reasons for decline in millet production in India
- In the 1960s before the Green Revolution, millets were extensively grown and consumed in India.
- With the Green Revolution, the focus, rightly so, shifted to food security and high-yielding varieties of wheat and rice.
- An unintended consequence of this policy was the gradual decline in the production of millets.
- Millets were increasingly seen as “poor person’s food”.
- The cost incentives provided via MSPs also favoured a handful of staple grains.
Health issues related to refined food
- Along with declining millet production, India saw a jump in consumer demand for ultra-processed and ready-to-eat products, which are high in sodium, sugar, trans-fats and even some carcinogens.
- This demand was again met by highly-refined grains.
- With the intense marketing of processed foods, even the rural population started perceiving mill-processed rice and wheat as more aspirational.
- This has lead us to the double burden of mothers and children suffering from micronutrient deficiencies and the astounding prevalence of diabetes and obesity.
Strategy for promotion of nutri-cereals
1) Rebranding the cereals as nutri-cereals
- The first strategy from a consumption and trade point of view was to re-brand coarse cereals/millets as nutri-cereals.
- As of 2018-19, millet production had been extended to over 112 districts across 14 states.
2) Incentive through hiking MSP
- Second, the government hiked the MSP of nutri-cereals, which came as a big price incentive for farmers.
- From 2014-15 to 2020 MSPs for ragi has jumped by 113 per cent, by 72 per cent for bajra and by 71 per cent for jowar.
- MSPs have been calculated so that the farmer is ensured at least a 50 per cent return on their cost of production.
3) Providing steady markets through inclusion in PDS
- To provide a steady market for the produce, the Modi government included millets in the public distribution system.
4) Increasing area, production and yield
- The Ministry of Agriculture & Farmers’ Welfare is running a Rs 600-crore scheme to increase the area, production and yield of nutri-cereals.
- With a goal to match the cultivation of nutri-cereals with local topography and natural resources, the government is encouraging farmers to align their local cropping patterns to India’s diverse 127 agro-climatic zones.
- Provision of seed kits and inputs to farmers, building value chains through Farmer Producer Organisations and supporting the marketability of nutri-cereals are some of the key interventions that have been put in place.
5) Intersection of agriculture and nutrition
- The Ministry of Women and Child Development has been working at the intersection of agriculture and nutrition by -1) setting up nutri-gardens, 2) promoting research on the interlinkages between crop diversity and dietary diversity 3) running a behaviour change campaign to generate consumer demand for nutri-cereals.
Consider the question “What are the reasons for decline in the millet production in India? What are the steps taken by the government to encourage its production?”
Conclusion
As the government sets to achieve its agenda of a malnutrition-free India and doubling of farmers’ incomes, the promotion of the production and consumption of nutri-cereals seems to be a policy shift in the right direction.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NHRC
Mains level: Sex workers
The National Human Rights Commission (NHRC) recognised sex workers as informal workers in their advisory on “Human Rights of Women in the context of COVID 19”.
Try this question for mains:
Q.Recognizing sex workers as informal workers is a myopic and moralistic objection of human rights activism. Discuss.
What is the NHRC advisory?
- The NHRC in an effort to secure the rights of all excluded and marginalised women included sex workers as informal workers in their advisory on ‘Women at Work’.
- The advisory asked officials to recognise sex workers as informal workers and register them so they are able to avail the benefits of a worker.
- The Ministries have been asked to issue temporary documents so that the sex workers like all other informal workers, can access all welfare measures and health services.
Why is the advisory important?
- The advisory included sex workers among groups that they were considered as part of vulnerable and marginal sections of society thereby consider them as citizens who are deserving of the protection of human rights.
- To do this, NHRC had sought expert advice, and both the government and constitutional bodies had stood by the protection of the human rights and dignity of sex workers.
- For many, it is a welcome move and an important milestone in achieving constitutional rights for sex workers.
Legality check of such work
- The Immoral Traffic (Prevention) Act — lays down that the institution of prostitution is illegal.
- Sex is either a consensual engagement between two adults or it is rape.
- Commercial sex, if engaged through any institutional process is illegal and liable for prosecution. Hence the Government of India never recognised sex work.
Criticisms of this advisory
- The feminists who wish to end sex slavery are critical of this NHRC’s move.
- There has not been a single instance where a woman has voluntarily gone into prostitution.
- Therefore they have regarded this as an absolute failure to not provide viable options to women to engage in productive work.
Back2Basics: National Human Rights Commission (NHRC)
- The NHRC is a statutory public body constituted on 12 October 1993 under the Protection of Human Rights Ordinance of 28 September 1993.
- It was given a statutory basis by the Protection of Human Rights Act, 1993 (PHRA).
- This act defines Human Rights as “Rights Relating To Life, liberty, equality and dignity of the individual guaranteed by the Constitution or embodied in the International Covenants and enforceable by courts in India.
Functions
- Proactively or reactively inquire into violations of human rights by the government of India or negligence of such violation by a public servant
- Protection of human rights and recommend measures for their effective implementation
Composition
The NHRC consists of The Chairman and Four members (excluding the ex-officio members)
- A Chairperson, who has been a Chief Justice of India or a Judge of the Supreme Court
- One member who is, or has been, a Judge of the Supreme Court of India, or, One member who is, or has been, the Chief Justice of a High Court
- Three Members, out of which at least one shall be a woman to be appointed from amongst persons having knowledge of, or practical experience in, matters relating to human rights
- In addition, the Chairpersons of National Commissions serve as ex officio members.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: Gender gap in labor market
Gender equality across the world remains a far-fetched goal and no country has achieved it so far, according to the 2020 edition of the United Nations report on the state of gender equality in the world.
Try this question for mains:
Q.Discuss how marriage age and women’s health are linked with each other?
About the Report
- The report titled “World’s Women: Trends and Statistics” was released by the UN-DESA.
- The report provided a reality-check on the global status of women 25 years since the world adopted the Beijing Declaration and Platform for Action.
- It presented the global state of gender equality in six critical areas: Population and families; health; education; economic empowerment and asset ownership; power and decision-making; and violence against women and the girl child as well as the impact of COVID-19.
Highlights on status of women
- The gender gap in the labour market, for example, has not budged a bit since 1995.
- While the status of women has improved with regard to education, early marriage, childbearing and maternal mortality, the progress has stagnated in other areas.
Participation in the labour market
- The gender gap in the labour market has remained as it was since 1995: The gap of 27 percentage points has barely changed since then, the report showed.
- Only 47 per cent women of working age participated in the labour market, compared to around 74 per cent men, according to the report.
- The largest gender gap in labour force participation was observed in the prime working age (25-54).
- This gap has remained unaddressed since 1995 and was at 32 percentage points as of 2020, according to the report. It was 31 percentage points in 1995.
- In India, the ratio of female-to-male labour force participation rate was 29.80 in 2019 as against the desired ratio of 50 per cent.
Working for free
- The data in the interactive UN report showed how women remained under the burden of unpaid domestic and care work.
- On an average day, women globally spent about three times (4.2 hours) as many hours on unpaid domestic and care work as men (1.7 hours).
- Unpaid domestic work includes activities related to the maintenance of the household, including food preparation, upkeep of the home, caring for pets etc.
Family responsibilities
- Family responsibilities and unequal distribution of unpaid domestic and care workers were among the primary reasons for women not joining the labour force.
- Their participation depended on their liabilities and responsibilities in their household, noted UN. It found that women living alone were more likely to be in the labour market.
- On an average, 82 per cent women of prime working-age living alone were in the labour market, compared to 64 per cent women living with a partner and 48 per cent living with a partner and children.
- Their participation rates in the economy were found to improve in the latter part of their lives after their responsibilities reduced — when their children grew older.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Asteroids, Bennu
Mains level: NASA's feat of landing on an asteroid
NASA’s OSIRIS-REx spacecraft briefly touched asteroid Bennu, from where it is meant to collect samples of dust and pebbles and deliver them back to Earth in 2023.
The OSIRIS-REx mission
- OSIRIS-REx stands for Origins, Spectral Interpretation, Resource Identification, Security, Regolith Explorer. This is NASA’s first mission meant to return a sample from the ancient asteroid.
- The mission is essentially a seven-year-long voyage and will conclude when at least 60 grams of samples are delivered back to the Earth.
- As per NASA, the mission promises to bring the largest amount of extraterrestrial material back to our planet since the Apollo era.
- The mission was launched in 2016, it reached its target in 2018 and since then, the spacecraft has been trying to match the velocity of the asteroid using small rocket thrusters to rendezvous it.
- This week, the spacecraft’s robotic arm called the Touch-And-Go Sample Acquisition Mechanism (TAGSAM), made an attempt to “TAG” the asteroid and collected a sample.
About Bennu
- Bennu is a B-type asteroid, implying that it contains significant amounts of carbon and various other minerals.
- It was discovered by a team from the NASA-funded Lincoln Near-Earth Asteroid Research team in 1999.
- Because of its high carbon content, the asteroid reflects about four per cent of the light that hits it, which is very low when compared with a planet like Venus, which reflects about 65 per cent of the light. Earth reflects about 30 per cent.
- Around 20-40 per cent of Bennu’s interior is empty space and scientists believe that it was formed in the first 10 million years of the solar system’s formation, implying that it is roughly 4.5 billion years old.
Why are scientists studying asteroid Bennu?
- Bennu is an asteroid about as tall as the Empire State Building and located at a distance of about 200 million miles away from the Earth.
- Scientists study asteroids to look for information about the formation and history of planets and the sun since asteroids were formed at the same time as other objects in the solar system.
- Another reason for tracking them is to look for asteroids that might be potentially hazardous. It is also relatively close to the Earth.
- It is for these reasons that scientists are interested in gathering information about this particular asteroid.
- Significantly, Bennu hasn’t undergone drastic changes since its formation over billions of years ago and therefore it contains chemicals and rocks dating back to the birth of the solar system.
How do chemicals and rocks offer scientists clues about the solar system?
- Because of Bennu’s age, it is likely to contain material that contains molecules that were present when life first formed on Earth, where life forms are based on carbon atom chains.
- Even so organic material like the kind scientists hope to find in a sample from Bennu doesn’t necessarily always come from biology.
- It would, though, further scientists’ search to uncover the role asteroids rich in organics played in catalyzing life on Earth.
Back2Basics: Asteroid
- Asteroids are rocky objects that orbit the Sun, much smaller than planets. They are also called minor planets.
- According to NASA, 994,383 is the count of known asteroids, the remnants from the formation of the solar system over 4.6 billion years ago.
- Asteroids are divided into three classes. First, those found in the main asteroid belt between Mars and Jupiter, which is estimated to contain somewhere between 1.1-1.9 million asteroids.
- The second group is that of Trojans, which are asteroids that share an orbit with a larger planet.
- The third classification is Near-Earth Asteroids (NEA), which have orbits that pass close by the Earth. Those that cross the Earth’s orbit are called Earth-crossers.
- More than 10,000 such asteroids are known, out of which over 1,400 are classified as potentially hazardous asteroids (PHAs).
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Blue Dot Network, BRI
Mains level: Blue Dot Network
A group of US Senators has written to India asking to join the Blue Dot Network.
Try this MCQ:
Q.The Blue Dot Network recently seen in news is a global alliance for:
a) Beaches Certification
b) Infrastructure development
c) 5G connectivity
d) Patents regulation
The Blue Dot Network
- Blue Dot is a US-led collaboration with Australia and Japan that supports private-sector-led infrastructure financing opportunities in response to China’s Belt and Road Initiative (BRI).
- It was formally announced on 4 November 2019 at the Indo-Pacific Business Forum in Bangkok, Thailand on the sidelines of the 35th ASEAN Summit.
- It is led by the U.S. International Development Finance Corporation, Japan Bank for International Cooperation, and Department of Foreign Affairs and Trade of Australia.
- It is expected to serve as a global evaluation and certification system for roads, ports and bridges with a focus on the Indo-Pacific region.
Fundamental difference between BRI and Blue Dot
- While the former involves direct financing, giving countries in need immediate short-term relief, the latter is not a direct financing initiative and therefore may not be what some developing countries need.
- The question is whether Blue Dot offering first-world solutions to third-world countries.
- Secondly, Blue Dot will require coordination among multiple stakeholders when it comes to grading projects.
- Given the past experience of Quad, the countries involved in it are still struggling to put a viable bloc. Therefore, it remains to be seen how Blue Dot fares in the long run.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Tubarial glands
Mains level: Not Much
Researchers from the Netherlands have discovered a new location of salivary glands.
Try this PYQ:
Q.With references to the scientific progress of ancient India, which of the statements given below are correct?
- Different kinds of specialized surgical instruments were in common use by 1st century AD.
- Transplant of internal organs in the human body had begun by the beginning of 3rd century AD.
- The concept of sine of an angle was known in 5th century AD.
- The concept of cyclic quadrilaterals was known in 7th century AD.
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 3 and 4 only
(c) 1, 3 and 4 only
(d) 1, 2, 3 and 4
Tubarial Glands
- The salivary gland system in the human body has three paired major glands and over 1,000 minor glands that are spread throughout the mucosa.
- These glands produce saliva necessary for swallowing, digestion, tasting, mastication and dental hygiene.
- When researchers were studying scans from about 100 people, they found a bilateral structure at the back of the nasopharynx and these glands had characteristics of salivary glands.
- Researchers have proposed the name “tubarial glands” for their discovery.
- The researchers believe that these glands would qualify as the fourth pair of major salivary glands.
- The proposed name is based on their anatomical location; the other three glands are called parotid, submandibular and sublingual.
Why are these glands being discovered only now?
- The location of these glands is at a poorly accessible anatomical location under the base of the skull, which is an area that can only be visualized using nasal endoscopy.
- Further, conventional imaging techniques such as a CT scan, MRI and ultrasound have not allowed the visualization of these glands.
- For the scans done on the 100 patients, a new type of scan called the PSMA PET/CT scan was used, which was able to provide the high sensitivity and specificity required to detect these glands.
What is the purpose of these glands?
- So far, researchers suspect that the physiological function of the glands is to moisten and lubricate the nasopharynx and the oropharynx.
- However, this interpretation needs to be confirmed with additional research.
Significance of this discovery
- The discovery is potentially good news for some cancer patients with head and neck cancers.
- Patients with head and neck cancers and tumours in the tongue or the throat are treated with radiation therapy that can damage the new salivary glands, whose location was not previously known.
- Oncologists will be able to circumvent these areas and protect them from the side effects of radiation which can lead to complications such as trouble speaking, swallowing and speaking.
- Some patients may even face an increased risk of caries and oral infections that can significantly impact their life.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: NEP 2020
Mains level: Paper 2- NEP 2020's focus on mathematical and computational thinking
The article deals with the issues with the emphasis on the coding instead of understanding the basic algorithmic process.
Issues with focusing on coding in NEP 2020
- The National Education Policy 2020 (NEP) envisages putting greater emphasis on mathematical and computational thinking throughout the school years.
- The framing in the NEP appears to put it at the same level of distinction as the more instrumental ‘coding’, and almost as a mere tool towards the utilitarian goals of artificial intelligence (AI) and data science.
- An overemphasis on learning the nitty-gritty of specific programming languages prematurely — even from middle school — may distract from focusing on the development of algorithmic creativity.
What is coding?
Coding is basically the computer language used to develop apps, websites, and software. Without it, we’d have none of the most popular technology we’ve come to rely on such as Facebook, our smartphones, the browser we choose to view our favorite blogs, or even the blogs themselves. It all runs on code.
About computation and algorithms
- Algorithmics is the abstract process of arriving at a post-condition through a sequential process of state changes.
- It is among the earliest human intellectual endeavours that has become imperative for almost all organised thinking.
- All early learning of counting and arithmetic is method-based, and hence algorithmic in nature, and all calculations involve computational processes encoded in algorithms.
- The core algorithmic ideas of modern AI and machine learning are based on some seminal algorithmic ideas of Newton and Gauss, which date back a few hundred years.
- Though the form of expressions of algorithms — the coding — have been different, the fundamental principles of classical algorithm design have remained invariant.
Algorithms in modern world
- In the modern world, the use of algorithmic ideas is not limited only to computations with numbers, or even to digitisation, communication or AI and data science.
- They play a crucial role in modelling and expressing ideas in diverse areas of human thinking, including the basic sciences of biology, physics and chemistry, all branches of engineering, in understanding disease spread, in modelling social interactions and social graphs, in transportation networks, supply chains, commerce, banking and other business processes, and even in economic and political strategies and design of social processes.
- Hence, learning algorithmic thinking early in the education process is indeed crucial.
So, how coding is different from arithmetics?
- Coding is merely the act of encoding an algorithmic method in a particular programming language which provides an interface.
- AS computational process can be invoked in a modern digital computer.
- Thus, it is less fundamental.
- While coding certainly can provide excellent opportunities for experimentation with algorithmic ideas, they are not central or indispensable to algorithmic thinking.
- After all, coding is merely one vehicle to achieve experiential learning of a computational process.
Way forward
- Instead of focusing on the intricacies of specific programming languages, it is more important at an early stage of education to develop an understanding of the basic algorithmic processes behind manipulating geometric figures.
- Indeed, this is a common outcome of the overly utilitarian skills training-based approaches evidenced throughout the country.
Conclusion
The NEP guideline of introducing algorithmic thinking early is a welcome step, it must be ensured that it does not degenerate and get bogged down with mundane coding tricks at a budding stage in the education process.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: MDR, IMPS, RTGS, NEFT
Mains level: Paper 3- Role of NPCI in transforming digital payment infrastructure in India
The article tracks the evolution of digital payments system in India and the transformational role played by the NPCI in it.
Adoption of digital payments in India
- Digital payments have found strong ground in India reducing all other modes of payments to the background.
- Through a faster system of simultaneous debits and credits, the money value is transferred from one account to the other across banks.
- With such versatility and ease of settling financial transactions, the growth of digital payments is going to be phenomenal, supported by banks and Fin-Tech companies.
Evolution of digital payments in India
- A major thrust toward large value payments was effected through the Real Time Gross Settlement System, or RTGS, launched by the RBI in March 2004.
- The large value payments on stock trading, government bond trading and other customer payments were covered under the RTGS.
- It substantially reduced the time taken for settlements.
- Around the same time, the RBI introduced National Electronic Funds Transfer, or NEFT to support retail payments.
- Now, NEFT is available round the clock and RTGS will follow from December 2020 — only a few countries have achieved this.
- These systems were seeded and reinforced with the setting up of the umbrella retail payments institution: National Payments Corporation of India (NPCI).
- NPCI was set up by 10 lead banks at the instance of the RBI in 2009.
- The NPCI as a not-for-profit company
How NPCI transformed retail payment systems in India
- The NPCI’s success against deeply entranced formidable international players, supported by innovative technology, viz. Unified Payments Interface (UPI) and Immediate Payment Service (IMPS), is well recognised by central banks in many other countries.
- The Bank for International Settlements’s endorsement of the NPCI model in 2019 is a major accolade.
- With digital payment being a public good like currency notes, it was necessary that the corporation was fully supported by the RBI and the government as an extended arm of the sovereign.
- It was also necessary to contain expectations on profits, avoiding direct or indirect control by powerful private interests could dilute the public good character of the outfit.
Issue of converting NPCI into for-profit
- Converting NPCI intro for-profit company will be a retrograde step with huge potential for loss of consumer surplus along with other strategic implications.
- Instead the strategy should be to assist the NPCI financially, either by the RBI or the government, to provide retail payment services at reduced price (in certain priority areas).
- This may also help support expansion of the payment system network and infrastructure in rural and semi-urban areas in partnership with Fin-Tech companies and banks.
Issue fo MDR
- In Budget 2020-21, the government prescribed zero Merchant Discount Rate (MDR) for RuPay and UPI, both NPCI products.
- Zero MDR on UPI and RuPay will help to popularise digital payments benefiting both customers and merchants.
- There is justification in this zero MDR prescription by the government.
- It is justified because depositors implicitly pay around 3% to banks as net interest margin, being the difference between saving and risk free bond rate, for enjoying certain payments services traditionally.
- When banks enjoy such a huge amount of current account savings account (CASA) deposits, in return, is it not incumbent on them to provide such payment services?
- The government left out other providers of digital payment products from this MDR prescription.
- Taking advantage of this dichotomy, many issuing banks switched to mainly Visa and Master cards for monetary gains.
- As customers were induced by such supplier banks, it created a kind of indirect market segmentation and cartel formation, though there is hardly any quality difference in payment products.
- It may be noted that even the European Central Bank imposed a ceiling on MDR for all, protecting consumer interest.
- It is hoped that the government will take corrective action in the next Budget to ensure a level playing field and to relieve the NPCI from such policy-induced market imperfection.
Pricing for digital payments
- The ideal pricing for digital payments products should be based on an analysis of-(i) producer surplus (ii) consumer surplus (i.e. gain or loss of utility due to pricing) (iii) social welfare for which we need cost-volume-price data.
- A factor which needs to be reckoned is the float funds digital payments allow (cash withdrawal is a drain on the banking system), which is a source of sizeable income for banks.
- The RBI will do well to study and arrive at a rational structure of pricing including MDR (possibly also penalty on default by customer).
Consider the question “Elaborate on how the NPCI has been successful in transforming the digital payment landscape in the country through innovations? What are the challenges facing retail payments infrastructures?”
Conclusion
Given that the digital payment system is like a national superhighway, for which the government has a crucial role to play in protecting consumers against exploitation.
Back2Basics: RTGS and NEFT
- With NEFT (National Electronic Funds Transfer)
you can transfer any amount to the recipient’s account in a one-on-one transfer basis.
- NEFT transactions don’t have a maximum limit for funds that can be transferred in a single day.
- The NEFT system is available round the clock throughout the year on all days (24x7x365).
- Funds are transferred in batches that are settled in 48 half-hourly time slots throughout the day.
- There is no maximum or minimum limit on the amount of funds that could be transferred through NEFT.
RTGS (Real Time Gross Settlement)
- Business owners can use RTGS when they need to transfer large amounts instantly.
- One advantage that RTGS has over the other methods is the transaction speed, since the entire amount is transferred in real time.
- The available hours for RTGS transactions vary based on the individual banks and their branches.
- There’s a minimum limit of Rs. 2 lakhs for RTGS transactions, and there’s no maximum limit as such.
What is MDR?
- The merchant discount rate (MDR) is charged to merchants for processing debit and credit card transactions.
- To accept debit and credit cards, merchants must set up this service and agree to the rate.
- The merchant discount rate is a fee, typically between 1%-3%, that merchants must consider when managing business costs
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