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  • Civil Aviation Ministry notifies draft Aircraft Security Rules, 2022

    The Ministry of Civil Aviation has notified the draft Aircraft Security Rules, 2022 which enable the aviation security regulator, Bureau of Civil Aviation Security (BCAS) to impose penalties upto ₹1 crore on airports and airlines for violation of security measures.

    Why such move?

    air

    • India’s civil Aviation Sector is facing a unique crisis a crisis of credibility and safety.
    • Some of the issues are-
    1. The windshield of a go air flight cracks mid-air, two go air flights suffer engine snags, a flight could not take off because of a dog on the runway.
    2. A bird was found in the cockpit of an Air India Express cruising at 37 000 feet.
    3. One flight suffered an engine snag another noticed smoke in the cabin.
    4. Luggage is not being loaded or is going missing.

    Draft Aircraft Security Rules, 2022

    • The rules will supersede Aircraft Security Rules, 2011 and were necessary after Parliament passed Aircraft Amendment Act, 2020 in September 2020.
    • It gives statutory powers to BCAS, along with the Director General of Civil Aviation and Aircraft Accident Investigation Bureau.
    • These allow them to impose penalties which could only be imposed by courts earlier.
    • The amendment were necessary after the UN aviation watchdog, International Civil Aviation Organisation (ICAO), raised questions about the three regulators functioning without statutory powers.

    Key features

    • Hefty fines: Once the draft Rules are finalised, the BCAS can impose a fine of ₹50 lakh to ₹1 crore (depending on the size of the company) on airports and airlines if they fail to prepare and implement a security programme.
    • Security clearance: They can commence operations only after seeking a security clearance.
    • Regulating passenger behaviour: Individuals will also face penalties ranging from ₹1 lakh to ₹25 lakh depending on the nature of offence.
    • Data security: In order to deal with cyber security threats, the rules also require each entity to protect its information and communication technology systems against unauthorised use and prohibit disclosure.
    • Unburdening the CISF: The draft rules now authorise airports to engage private security agents instead of CISF personnel at “non-core areas” and assign security duties as per the recommendation of the National Civil Aviation Policy, 2016.

     

    Tap to read more about: India’s ailing Civil Aviation Sector.

     

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  • Retail Inflation and the new trends

    Inflation

    Context

    • The recent data seems to indicate that retail inflation has possibly peaked and is now likely to trend downwards. But, it would be wise to exercise caution. The latest data, while providing useful nuggets of information about price trends in the economy, challenges some of the widely held conceptions about inflation, and gives mixed signals about its trajectory.

    Inflation

    What is a simple definition for inflation?

    • Inflation is an increase in the level of prices of the goods and services that households buy. It is measured as the rate of change of those prices. Typically, prices rise over time, but prices can also fall (a situation called deflation).

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    Inflation Rate

    • Inflation Rate is the percentage change in the price level from the previous period. If a normal basket of goods was priced at Rupee 100 last year and the same basket of goods now cost Rupee 120, then the rate of inflation this year is 20%.
    • Inflation Rate= {(Price in year 2 – Price in year 1)/ Price in year 1} *100

    Inflation

    Five broad trends emerge to consider as reasons behind high inflation.

    • Russia- Ukraine war:
    • The sharp rise in commodity prices as a consequence of the war is considered to have been largely responsible for the spurt in inflation this year, pushing it beyond the upper threshold of the RBI’s inflation-targeting framework.
    • For instance, India’s crude oil import price rose from $84.67 per barrel in January to $112.87 in March, and further to $116.01 in June. The ripple effects of higher commodity prices have been felt across the economy.
    • Inflation generalized in formal and informal sectors:
    • There are indications that inflation is getting more generalized across both the formal and informal segments of the economy.
    • One indication of this comes from the clothing and footwear category, a highly fragmented industry with the presence of both formal and informal segments. Another possible indication comes from rentals.
    • Rental inflation in India had tended to remain largely range-bound over much of the past few years. But as this category has the highest individual item-wise weight in the inflation index, any movement in either direction, however small, would have a large impact on core inflation.
    • Supply side disruptions during the pandemic: During the pandemic, supply-side disruptions had caused goods inflation to rise, even as services inflation remained relatively muted owing to risk-averse behaviour by consumers and restrictions on high-contact intensive sectors.
    • Competition and the pricing mechanism in the economy:
    • Prices are rigid on the downside will depend not only on how demand fares now with monetary conditions having been tightened, but also on the extent of competition in the economy, among others.
    • After all, greater market concentration creates conditions for greater pricing power. A badly damaged non-corporate sector (MSMEs) would have led to ruptures in the low-cost economy, increasing the pricing power of the corporate sector during this period.
    • Wage- price spiral:
    • Inflation in India is not a consequence of a strong economy. Wage growth in the large informal rural economy has been lower than inflation.
    • While some skill-intensive segments of the urban formal labour force may be able to exercise some bargaining power, the labour force participation rates suggest continuing slack in urban labour markets.

    Inflation

    What are the concerns?

    • Commodity should have come down over the period: If high core inflation in the months after the beginning of hostilities was an outcome of the passthrough, either in part or completely, of the Ukrainewar, then the decline in commodity prices since then should have led to a moderation in core inflation
    • Services inflation vs goods inflation: But as activities normalised, there was an expectation that services inflation would see a strong pick-up. The recent data indicates that this has not been the case. While services inflation has risen, it remains considerably lower than goods inflation, perhaps owing to a combination of lower cost-push pressures, more slack and less demand.

    Conclusion

    • While inflation may have peaked, it is far from being quashed. The RBI expects inflation to edge downwards from 6.5 per to 5 per cent in the first quarter of the next financial year (2023-24). But RBI ca not afford to underestimate the price pressures in the economy.

    Mains Question

    Q. What is inflation?  Some of the new emerging trends are considered while measuring rising inflation in the current scenario. Discuss.

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  • GST on Online Gaming, Casinos, Racing

    A ministerial panel is likely to recommend a uniform 28 percent tax GST rate on Online Gaming, irrespective of whether it is a game of skill or chance.

    Online gaming sector in India

    • In the past few years, India’s nascent online gaming industry witnessed an unprecedented rise, catapulting it to the top five mobile gaming markets in the world.
    • Registering a growth rate of 38%, online gaming is the next sunrise industry.
    • Currently, there are more than 400 gaming companies in India, and it is home to 420 million online gamers, second only to China, according to an analysis by KPMG.

    Types of gaming

    • The types of online gaming include:
    1. E-sports (well-organized electronic sports which include professional players) ex. Chess
    2. Fantasy sports (choosing real-life sports players and winning points based on players’ performance) ex. MPL cricket
    3. Skill-based (mental skill) ex. Archery
    4. Gamble (based on random activity) ex. Playing Cards, Rummy

    Why is the gaming industry booming in India?

    1. Digital India boom in the gaming industry
    2. Narrowing of the digital divide
    3. IT boom

    Other factors promoting the boom

    1. Growing younger population
    2. Higher disposable income
    3. Inexpensive internet data
    4. Introduction of new gaming genres, and
    5. Increasing number of smartphone and tablet users

    Prospects of online gaming

    • State List Subject:  The state legislators are, vide Entry No. 34 of List II (State List) of the Seventh Schedule, given exclusive power to make laws relating to betting and gambling.
    • Distinction in laws: Most Indian states regulate gaming on the basis of a distinction in law between ‘games of skill’ and ‘games of chance’.
    • Classification on dominant element: As such, a ‘dominant element’ test is utilized to determine whether chance or skill is the dominating element in determining the result of the game.
    • Linked economic activity: Staking money or property on the outcome of a ‘game of chance’ is prohibited and subjects the guilty parties to criminal sanctions.
    • ‘Game of Skill’ debate: Placing any stakes on the outcome of a ‘game of skill’ is not illegal per se and may be permissible. It is important to note that the Supreme Court recognized that no game is purely a ‘game of skill’ and almost all games have an element of chance.

    Need for regulation

    • No comprehensive regulation:  India currently has no comprehensive legislation with regards to the legality of online gaming or boundaries that specify applicable tax rates within the betting and gambling industry.
    • Ambiguity of the sector: The gaming sector is nascent and is still evolving, and many states are bringing about legislation seeking to bring about some order in the online gaming sector.
    • State list subject: Online gaming in India is allowed in most parts of the country. However, different states have their own legislation with regards to whether online gaming is permitted.
    • Economic advantage: Well-regulated online gaming has its own advantages, such as economic growth and employment benefits.

    Issues with online gaming

    • Gaming addiction: Numerous people are developing an addiction to online gaming. This is destroying lives and devastating families.
    • Compulsive gaming: Gaming by children is affecting their performance in schools and impacting their social lives & relationships with family members. Ex. PUBG
    • Impact on psychological health: Online games like PUBG and the Blue Whale Challenge were banned after incidents of violence and suicide.
    • Threat to Data privacy: Inadvertent sharing of personal information can lead to cases of cheating, privacy violations, abuse, and bullying.
    • Betting and gambling: Online games based on the traditional ludo, arguably the most popular online game in India, have run into controversy, and allegations of betting and gambling.

    Why hasn’t a comprehensive law yet materialized?

    • Earlier, states like Tamil Nadu, Telangana, Andhra Pradesh, and Karnataka also passed laws banning online games.
    • However, they were quashed by state High Courts on grounds that an outright ban was unfair to games of skill:
    1. Violation of fundamental rights of trade and commerce, liberty and privacy, speech and expression;
    2. Law being manifestly arbitrary and irrational insofar as it did not distinguish between two different categories of games, i.e. games of skill and chance;
    3. Lack of legislative Competence of State legislatures to enact laws on online skill-based games.

    Way forward

    • Censoring: Minors should be allowed to proceed only with the consent of their parents — OTP verification on Aadhaar could resolve this.
    • Awareness: Gaming companies should proactively educate users about potential risks and how to identify likely situations of cheating and abuse.
    • Regulating mechanism: A Gaming Authority in the central government should be created.
    • Accountability of the gaming company: It could be made responsible for the online gaming industry, monitoring its operations, preventing societal issues, suitably classifying games of skill or chance, overseeing consumer protection, and combatting illegality and crime.
    • All-encompassing legislation: the Centre should formulate an overarching regulatory framework for online games of skill. India must move beyond skill-versus-chance debates to keep up with the global gaming industry.

     

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  • India’s abstains in CITES vote on reopening Ivory Trade

    India’s decision not to vote against a proposal to re-open the international trade in ivory at the ongoing conference of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

    What is CITES?

    • CITES stands for the Convention on International Trade in Endangered Species of Wild Fauna and Flora.
    • It is as an international agreement aimed at ensuring “that international trade in specimens of wild animals and plants does not threaten their survival”.
    • It was drafted after a resolution was adopted at a meeting of the members of the International Union for Conservation of Nature (IUCN) in 1963.
    • It entered into force on July 1, 1975, and now has 183 parties.
    • The Convention is legally binding on the Parties in the sense that they are committed to implementing it; however, it does not take the place of national laws.
    • India is a signatory to and has also ratified CITES convention in 1976.

    CITES Appendices

    • CITES works by subjecting international trade in specimens of selected species to certain controls.
    • All import, export, re-exports and introduction from the sea of species covered by the convention has to be authorized through a licensing system.

    It has three appendices:

    • Appendix I includes species threatened with extinction. Trade-in specimens of these species are permitted only in exceptional circumstances.
    • Appendix II provides a lower level of protection.
    • Appendix III contains species that are protected in at least one country, which has asked other CITES Parties for assistance in controlling trade.

    What is the news?

    • India remained absent during the CITES conference aimed to re-open the international trade in ivory.

    Why such move by India?

    • Elephant remains one of India’s most powerful cultural and religious symbols.
    • A pioneer in banning even the domestic trade in ivory in 1986, India has always been at the forefront of global elephant conservation initiatives.

    What is the tussle over Ivory?

    • The international ivory trade was globally banned in 1989 when all African elephant populations were put in CITES Appendix I.
    • However, the populations of Namibia, Botswana, and Zimbabwe were transferred to Appendix II in 1997, and South Africa’s in 2000 to allow two “one-off sales”.
    • This is because ivory stockpiled from natural elephant deaths and seizures from poachers.
    • Subsequently, Namibia’s proposal for allowing a regular form of controlled trade in ivory by delisting the elephant populations of the four countries from Appendix II was rejected at CoP17 (2016) and CoP18 (2019).
    • At the ongoing CoP19, the proposal was moved by Zimbabwe but met the same fate.
    • These are low income countries often battling to generate some revenue from Ivory trade.

    India and ivory trade

    • The endangered Asian elephant was included in CITES Appendix I in 1975, which banned the export of ivory from the Asian range countries.
    • In 1986, India amended The Wild Life (Protection) Act, 1972 to ban even domestic sales of ivory.
    • After the ivory trade was globally banned, India again amended the law to ban the import of African ivory in 1991.
    • In 1981 when New Delhi hosted COP3, India designed the iconic CITES logo in the form of an elephant.
    • Over the years, India’s stand has been unequivocal on the ivory issue.

    What has changed now?

    • After protracted negotiation, India signed an agreement in July with Namibia to fly in cheetahs.
    • India has agreed to promote “sustainable utilisation and management of biodiversity” by supporting advances in this area of bilateral cooperation “at international forums including meetings of” CITES.
    • While the word “ivory” was not mentioned, Namibia sought India’s support under this agreement.

     

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  • Arittapatti: Tamil Nadu’s first biodiversity heritage site

    Arittapatti

    The Tamil Nadu Government has issued a notification declaring Arittapatti in Melur block, Madurai district, a biodiversity heritage site.

    About Arittapatti

    • Arittapatti village, rich in ecological and historical significance, houses around 250 species of birds including three important raptors -birds of prey, namely the Laggar Falcon, the Shaheen Falcon and Bonelli’s Eagle.
    • It is also home to wildlife such as the Indian Pangolin, Slender Loris and pythons.
    • The biodiversity-rich area is surrounded by a chain of seven hillocks or inselbergs that serve as a watershed, charging 72 lakes, 200 natural springs and three check dams.
    • The Anaikondan tank, built during the reign of Pandiyan kings in the 16th century is one among them, the government notification said.
    • Several megalithic structures, rock-cut temples, Tamil Brahmi inscriptions and Jain beds add to the historical significance of the region.

    What is a Biodiversity Heritage Site (BHS)?

    • Biodiversity Heritage Sites are rich Biodiversity Areas and are important components of local ecosystems which are being conserved and managed by the society.
    • BHS are declared as per provision under Section 37(1) of Biological Diversity Act, 2002.
    • The State Government may, from time to time in consultation with the local bodies, notify the areas of biodiversity importance as biodiversity heritage sites under this Act.

     

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  • India’s compulsion to develop The Andaman and Nicobar Islands (ANI)

    Andaman

    Context

    • The Andaman and Nicobar Islands (ANI) are in the news as the union government proposing a slew of infrastructure projects to boost business and tourism on the islands, conservation groups are on the warpath.

    The significance of Andaman and Nicobar Islands (ANI)

    • Oceanic outpost: The ANI is an oceanic outpost for continental India.
    • Facilitates unique surveillance: With a critical vantage location overlooking the ten-degree and six-degree channels (through which a vast majority of cargo and container traffic in the eastern Indian Ocean transits), the islands give India a unique surveillance and maritime interdiction capability.
    • Strategically important: The ANI is a vital ‘staging post’ for maritime operations, and a hub for logistics, providing operational turnaround for Indian warships and aircraft deployed in the Andaman Sea.

    One go Memory shot: Geography of Andaman and Nicobar Islands (ANI)

    • Location: Located between 6° and 14° North Latitude and 92° and 94° East Longitude lie the Andaman and Nicobar Islands, a union territory in India.
    • Two groups of Island: It consists of two groups of islands. The islands located north of 10° north latitude are known as Andaman while islands located south of 10° north latitude are called Nicobar.
    • The Andamans: More than 300 islands make up the Andamans. North, Middle, and South Andaman, known collectively as Great Andaman, are the main islands;
    • The 10- degree channel: The 10-degree channel which is about 145 km long separates Little Andaman in the south from the Nicobar Islands.
    • The Nicobars: The Nicobars consists of 19 islands. Among the most prominent is Car Nicobar in the north; and Great Nicobar in the south. About 90 miles to the southwest of Great Nicobar lies the northwestern tip of Sumatra, Indonesia.
    • Formation: Both the Andaman and Nicobar groups are formed by the above-sea extensions of submarine ridges of mountains and are a part of a great island arc. The highest peak is 2,418 feet at Saddle Peak on North Andaman, followed by Mount Thullier at 2,106 feet on Great Nicobar and Mount Harriet at 1,197 feet on South Andaman. Barren island, the only known active Volcano in south Asia lies in the Andaman Sea. In the late 20th and early 21st centuries, there were volcanic eruptions on Barren Island.
    • Andaman Terrain: Formed of sandstone, limestone, and shale of Cenozoic age, the terrain of the Andamans is rough, with hills and narrow longitudinal valleys. Flat land is scarce and is confined to a few valleys.
    • Nicobar Terrain: The terrain of the Nicobar is more diverse than that of the Andamans. Some of the Nicobar Islands, such as Car Nicobar, have flat coral-covered surfaces with offshore coral formations that prevent most ships from anchoring. Other islands, such as Great Nicobar, are hilly and contain numerous fast-flowing streams.
    • Great Nicobar is the only island in the territory with a significant amount of fresh surface water.
      Climate
      : The climate of the Andaman and Nicobar Islands is tropical but is moderated by sea.

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    Past objections on India developing Andaman and Nicobar Islands (ANI)

    • Perspective of India’s diplomatic community:
    • When India first began developing the ANI in the 1980s, the defence and foreign policy establishments were not entirely in agreement.
    • India’s diplomatic community opposed the militarization plan, arguing that turning the islands into a strategic-military garrison would weaponize the littorals, an outcome unlikely to sit well with India’s maritime neighbors.
    • Neighbor’s apprehensions: Indonesia and Malaysia were apprehensive that India would use its military facilities on the Andamans to dominate its region, and project power east of Malacca.

    Andaman

    Today’s perspective India developing Andaman and Nicobar Islands (ANI)

    • More empathy towards India: Today arguably, there is more empathy for Indian compulsions to develop the ANI. It is clear that developing the islands is a necessity for India that could not be overlooked.
    • India’s compulsion: With China expanding its footprint in India’s backyard, regional states realise New Delhi has little option but to consolidate strategically on the islands.
    • Securing maritime borders: In the aftermath of the June 2020 standoff with China in Ladakh, the Indian military has been under growing pressure to forestall Chinese adventurism in the Indian Ocean.
    • Higher stakes for India in eastern Indian Ocean: With China moving to expand its presence in India’s neighbourhood, including at Maldives (Feydhoo Finolhu), Pakistan (Gwadar), Sri Lanka (Hambantota), and Bangladesh (at Cox Bazaar where China is said to be constructing a submarine base), the stakes for India in the eastern Indian Ocean have never been higher.
    • Intentions are good: Asia’s leaders knew that India’s intentions are good because it is willing to keep its security presence on the strategic islands to a minimum.

    Rational behind developing Andaman and Nicobar Islands (ANI)

    • To counter China’s belt and road Initiative: New Delhi also needs to counter China’s Belt and Road Initiative. The manner of China’s development of infrastructure projects in the Bay of Bengal suggests that it seeks both economic leverage and strategic prowess in South Asia.
    • Countering China Dual use facilities: By some accounts, China is looking for military access to Chinese-built facilities in the Bay of Bengal. Beijing, reportedly, is on a drive to create ‘dual-use’ facilities that have both commercial and military applications.

    What could be the way to counter China in the region

    • By expanding military Presence in BOB: One way for India to counter China’s forays in the Bay of Bengal would be to expand Indian military presence in the littorals. The process is already underway
    • By turning islands into logistic support facilities for navies: The other way for India to counter China is to develop its island territories in the eastern Indian Ocean and offer military facilities therein for logistics support to navies from friendly Quad countries.

    Delicate ecology of the island cannot be ignored

    • Environmentalists contend that construction activity on ecologically sensitive islands could lead to a large-scale loss of biodiversity, which could hurt local communities and the islands’ indigenous people.
    • New Delhi cannot afford to ignore the ecological implications of infrastructure development on the islands, in particular, the proposal for a container terminal at Campbell Bay on the Great Nicobar Island.
    • The project entails the mass culling of forests and could take a toll on the region’s delicate ecological balance.
    • New hotels, resorts, and a trans-shipment port could upend decades of conservation efforts.

    Conclusion

    • The need of the hour is to balance competing requirements: enable development on the islands, while avoiding large-scale environmental damage. As ‘high-wire’ acts go, this is going to be a hard walk for Indian decision-makers.

    Mains question

    Q. China is moving towards increasing its presence in India’s neighborhood and is challenging India in many ways. Analyze India’s compulsion to develop the Andaman and Nicobar Islands (ANI).

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  • Role of private sector in India’s Space programmes

    private

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    Context

    • The launch of the Vikram S (Mission Prarambh) rocket last week has been rightly hailed as an important milestone in India’s outer space journey. It is the first privately built Indian rocket to make it to space.

    Private players in space sector

    • Lack of Enabling policy: The country’s private sector has the talent and experience to shorten that distance if Delhi creates the enabling policy environment.
    • Monopoly of Government: When space emerged as an important endeavour in the second half of the 20th century, governments were in the lead. The cost, complexity and research-intensity of the space effort meant the space programmes everywhere became a government monopoly.
    • Government can no longer ignore private players: But in the 21st century, the role of the private sector has dramatically expanded. Satellites were once owned only by governments but today private companies lead the satellite business.

    private

    Major private players and their space endeavor

    • Starlink satellite system: Elon Musk’s Starlink satellite system is now a major player with more than 2,300 satellites in low earth orbit they deliver a variety of space services including useful military information to the armed forces of Ukraine in their fight against Russian forces.
    • Amazon’s Project Kuiper: Plans to launch more than 3,000 satellites in the coming years to offer a range of services, including broadband internet. This will involve making at least three satellites a day.
    • One-web cooperation: Airtel in India is a partner in the One-Web corporation that offers connectivity through its system of nearly 500 satellites.
    • Breaking the monopoly of Government: The business of launch vehicles the most demanding of space activities remained a state monopoly until recently. Elon Musk’s SpaceX has broken through that launch monopoly and Amazon’s Blue Origin rocket will soon be in the market too.

    History of India’s space programme

    • Space for national development only: Delhi’s main objective was to leverage outer space to accelerate national development. Eventually, military and commercial dimensions began to envelop the Indian space programme.
    • Cooperation with Soviet Union: India’s space programme began with intensive cooperation with the Western countries and later with the Soviet Union. Delhi also offered space cooperation to other developing countries within the rubric of engagement with friendly governments.
    • Sanctions halted India’s progress: The non-proliferation sanctions on India after its first nuclear test in 1974 severely constricted the space for the country in international space cooperation. It was only after the historic civil nuclear initiative that the sanctions regime began to ease.

    private

    What should be India’s future approach in space domain?

    • Commercially leveraging the space using MTCR: India is now part of the Missile Technology Control Regime that regulates commerce in space related commodities and technologies.
    • Dual use technology under Wassenaar Arrangement: India is also part of the Wassenaar Arrangement that controls trade in dual use technologies that can be used for both civilian and military purposes.
    • The growing range of new space possibilities: From using satellites for delivering broadband internet to the mining of the Moon and from space manufacturing to deep space exploration. Put simply, the scale of the global economy is rapidly growing its value is expected to more than double from about $450 billion in 2022 to nearly one trillion dollars within a decade.
    • It must be about business and economy: For India, outer space can no longer be about narrowly framed ideas of “development” and “national prestige”. It must be about business and economy. The current Indian share of the global space economy is barely 2 per cent. PM Modi has been demanding that India rapidly increase its share to 8 per cent in the coming years.
    • The private sector companies for larger role: Raising the Indian share of the global space economy can only be done by drawing in the private sector companies to play a larger role. Consider, for example, The Artemis 1 rocket was launched last week and the programme involves a number of leading aerospace companies like Boeing, Lockheed, Northrop Grumman, Airbus and Space X.
    • International cooperation in national space programmes: If Apollo was a purely national project of the United States, the Artemis programme is a multinational endeavor between the US and its partners, including France, Canada, and Japan. Meanwhile Russia and China are coming together to collaborate not only on their space programmes, but also on building a joint base on the Moon that will establish long term human presence there.
    • Capital support for space programme: India has just about embarked on a programme to enhance the contribution of its private sector in outer space. India is also drawing on foreign capital to support its start-ups. Singapore’s sovereign wealth fund GIC, for example, is a major investor in Skyroot Aerospace that launched the Vikram S rocket.

    Conclusion

    • Many Western aerospace companies will be eager to invest in India’s space programme as it begins to open up. India is also coming to terms with the fact that international cooperation is not just an “add-on” to the national space programme, but must be an integral part of India’s space strategy.

    Mains Question

    Q. 20th century was dominated by monopoly of government in space domain. Elaborate. How India can commercialize the space sector with help of private players?

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  • Financial Inclusion in Age of Digitization

    Financial Inclusion

    Context

    • The use of technology in financial inclusion stands to be pertinent in today’s context as it paves the way towards inclusive growth through the upliftment of disadvantaged sections of society.

    Importance of Financial Inclusion

    • Meaning of Financial inclusion: It refers to the availability to both individuals and companies of useful and cost-effective financial goods and services, including payments, transactions, savings, credit, and insurance, that are sustainably and ethically provided.
    • Provides social mobility: The importance of financial inclusion lies in the fact that it allows social mobility. These resources help empower individuals and foster communities, which can aid in promoting economic growth.
    • More financial services: Moreover, account holders are more likely to utilize additional financial services such as credit and insurance to launch and grow enterprises, make investments in their children’s or own health or education, manage risk, and recover from financial setbacks, all of which can enhance their overall quality of life.

    Financial Inclusion

    Challenges to the financial inclusion

    • Inoperative bank accounts: Nearly 80 percent of the Indian population has a bank account, and nearly 18 percent (81.38 million) of bank accounts are inoperative, having “zero balance”. Moreover, up to 38 percent of accounts are inactive, which means that there have been no deposits or withdrawals in the past year, demonstrating that many Indians are still not fully integrated into the formal banking system.
    • Poor telecommunication infrastructure: India still needs a robust telecommunication infrastructure with a stable broadband internet connection. Despite progress in increasing technological features with increasing speeds, the inability of the entire country to adapt to these innovations has widened the gap.
    • All citizens are not cell phone users: India additionally faces the hurdle of getting its citizens online, with more than 310 million individuals needing a basic cell phone. This prevents account holders from receiving crucial information, such as details relating to account transactions.
    • Increasing dependency on local agents: In addition, financial institutions also need to be more willing to deliver messages for transactions of small quantities. These factors have led to an increasing dependency on local agents.

    Financial Inclusion

    The correlation between Technology, digital divide and financial inclusion

    • Rural- Urban digital Divide: There is an evident divide between the urban-rural regions that dominate India. Only 4.4 rural families have computers, compared to 14.4 percent of urban households and 14.9 percent of rural homes have internet connectivity, compared to 42 percent of families in metropolitan regions. Meanwhile, only 13 percent of adults in rural regions have access to the internet, compared to 37 percent in metropolitan areas.
    • High lending rates in rural area: Specifically, such gaps are associated with various factors in finance, starting with small-time lenders charging high-interest rates common in rural regions. Access to credit still needs to be solved. Government programmes are yet to reach more remote areas to improve loan availability efficiently.
    • Unawareness about Online loans: Individuals find that online loans need more options from reliable financial institutions or digital lending. Additionally, rural clients need help accessing prospective financial services due to complicated banking procedures such as requiring identity credentials and maintaining a specific balance in an account.
    • Limited access to technology: The digital divide is also a result of limited access to computer and communication technologies. In India, fewer people can afford the device needed to access digital information.
    • Single nationwide approach is problematic: India additionally faces the burden of providing diversified content across different regions, as individuals across India have different mother tongues. Moreover, the number of individuals who have access to computers or are knowledgeable enough to utilise the internet varies too widely between states. Thus, a blanket approach cannot be implemented nationwide.
    • Lack of Financial literacy: Indian citizens lack the potential to maximise technological interventions. About 266 million adults are illiterate. The lack of financial literacy has also greatly impeded the growth of financial inclusion, with many financial cyber-crimes peaking in proportion to the growing distrust among rural residents, leading to lower adoption rates and a 6-percent jump in cybercrimes in the same year.
    • Concerns of data privacy: As Personal Identifiable Information (PII) guidelines are not strictly enforced and adhered to, large quantities of data are readily accessible to numerous parties, raising serious concerns about data privacy.

    Financial Inclusion

    What can be done to bridge digital divide for financial inclusion?

    • Digital inclusion strategies: It lies in the hands of the government to implement a financial inclusion policy and look at the reasons behind financial exclusion and effectively address them. Information and Communication Technology policies are primarily top-down and supply-focused. Thus, it is necessary to develop financial goods and services focused on the needs of citizens and the disadvantaged. These policies should focus on digital inclusion strategies to ensure that rural areas can access proper internet connectivity.
    • Information in regional language: to ensure digital financial inclusion, the government should encourage the middle-aged bracket to educate themselves in reading and writing to use the various facilities they provide. Government websites have information primarily in Hindi and English, excluding large sections of the population. A systemic strategy focused on digital skills, and financial literacy should be implemented in each region, keeping in mind the language barrier and access to technology.
    • Focus on vulnerable sections: To combat financial fraud, implementing a one-to-one Management of Financial Services (MFS) agent mentorship programme that focuses on vulnerable populations and teaches them the fundamentals of mobile and online interaction is possible. Additionally, removing the barriers to financial service access for low-income persons by reducing transaction costs could facilitate increased participation, as observed in Nepal, where free and easily accessible accounts were more prevalent among women

    Conclusion

    • The digital divide affects every area of life, including literacy, wellness, mobility, security, access to financial services, etc. Therefore, for a fast-growing nation such as India, the focus needs to shift from simple economic growth to equitable and inclusive growth.

    Mains Question

    Q. What are the challenges to Digital financial inclusion in India? Explain in detail the strategies needed to tackle the financial inclusion?

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  • Trans-shipment Terminal at Great Nicobar: strategic imperative and ecological concerns

    nicobar

    The Ministry of Environment, Forest and Climate Change gave environmental clearance for the ambitious Rs 72,000 crore development project on the strategically important Great Nicobar Island.

    About the Great Nicobar Development Project

    • A “greenfield city” has been proposed, including an:
    1. International Container Transhipment Terminal (ICTT),
    2. Greenfield international airport,
    3. Power plant, and
    4. Township for the personnel who will implement the project
    • The project is to be implemented in three phases over the next 30 years.

    When was the project incepted?

    • The proposal to develop Great Nicobar was first floated in the 1970s, and its importance for national security and consolidation of the Indian Ocean Region has been repeatedly underlined.

    Scope of the project

    • A total 166.1 sq km along the southeastern and southern coasts of the island have been identified for project along a coastal strip of width between 2 km and 4 km.
    • Some 130 sq km of forests have been sanctioned for diversion, and 9.64 lakh trees are likely to be felled.
    • Development activities are proposed to commence in the current financial year, and the port is expected to be commissioned by 2027–28.
    • More than 1 lakh new direct jobs and 1.5 lakh indirect jobs are likely to be created on the island over the period of development.

    Features of the Project

    • Transshipment hub of the East: The proposed port will allow Great Nicobar to participate in the regional and global maritime economy by becoming a major player in cargo transshipment.
    • Naval control: The port will be controlled by the Indian Navy, while the airport will have dual military-civilian functions and will cater to tourism as well.
    • Urban amenities: Roads, public transport, water supply and waste management facilities, and several hotels have been planned to cater to tourists.

    Why need such project?

    • Geostrategic advantage: The Island has a lot of tourism potential, but the government’s greater goal is to leverage the locational advantage of the island for economic and strategic reasons.
    • Critical shipping chokepoint: Great Nicobar is equidistant from Colombo to the southwest and Port Klang and Singapore to the southeast, the region through which a very large part of the world’s shipping trade passes.
    • Huge source of revenue: The proposed ICTT can potentially become a hub for cargo ships travelling on this route.
    • Countering Chinese presence: Increasing Chinese assertion in the Bay of Bengal and the Indo-Pacific has added great urgency to this imperative in recent years.

    Malacca Dilemma

    In recent years, China’s efforts to expand its footprint in the Indian Ocean Region to overcome its ‘Malacca Dilemma’ (China’s fear of a maritime blockade at the Straits of Malacca) and fulfil its ‘Maritime Silk Road’ ambitions have fuelled apprehensions about freedom of navigation in these waters.

    Issues with the Project

    • Ecological damage: The proposed massive infrastructure development in an ecologically important and fragile region, including the felling of almost a million trees, has alarmed many environmentalists.
    • Threats to marine ecosystem: The loss of tree cover will not only affect the flora and fauna on the island, it will also lead to increased runoff and sediment deposits in the ocean, impacting the coral reefs in the area.

    Damage control measures by the govt

    • India has successfully translocated a coral reef from the Gulf of Mannar to the Gulf of Kutch earlier.
    • The Zoological Survey of India is currently in the process of assessing how much of the reef will have to be relocated for the project.
    • The government has said that a conservation plan for the leatherback turtle is also being put in place.
    • The project site already is outside the eco-sensitive zones of Campbell Bay and Galathea National Park.

    Conclusion

    • Given its physical location, the A&N Islands are the natural platform for collaboration between India and Southeast Asia.
    • By most accounts, political will in India and other countries to develop these islands is high.

    Back2Basics: Great Nicobar Islands

    • Great Nicobar, the southernmost of the Andaman and Nicobar Islands, has an area of 910 sq km.
    • It has tropical wet evergreen forests, mountain ranges reaching almost 650 m above sea level, and coastal plains.
    • The A&N Islands are a cluster of about 836 islands in the eastern Bay of Bengal, the two groups of which are separated by the 150-km wide Ten Degree Channel.
    • The Andaman Islands lie to the north of the channel, and the Nicobar Islands to the south.
    • Indira Point on the southern tip of Great Nicobar Island is India’s southernmost point, less than 150 km from the northernmost island of the Indonesian archipelago.
    • Great Nicobar is home to two national parks, a biosphere reserve, and the Shompen and Nicobarese tribal peoples, along with ex-servicemen from Punjab, Maharashtra, and Andhra Pradesh who were settled on the island in the 1970s.

     

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  • Centre sets ‘standard’ for product Reviews on E-Commerce Platforms

    review

    The Centre is bringing out a standard for publishing product reviews for e-commerce platforms this week.

    What are the reviews on e-com platforms?

    • Reviews are the ratings given by customers who make any purchase on the e-commerce platform.
    • This is generally a star-rating system followed by user comments.
    • It is particularly a social proof given by people who make judgments and decisions based on the collective actions of others.

    Why do e-coms take such reviews?

    • Reviews are much more than just comments and can result in relevant content and information, both for you and your customers.
    • Since the biggest disadvantage of e-commerce is not offering the possibility for consumers to be face to face with the product, reviews can break this barrier.
    • Reviews can help sell more, gain new customers, accompany the consumer’s satisfaction, and target better.

    Why reviews matter?

    • Ensure a good purchasing experience;
    • Create surveys and debates on products and/or services;
    • Provide a field for comments and instigate interaction;
    • Know how to deal with complaints and try to resolve them.

    Why discuss this?

    • Consumer grievances ignored: More than one in two (58 per cent) consumers complain that their negative product ratings and reviews are not being published by e-commerce platforms.
    • Positive bias: Only 23 per cent consumers said that their negative reviews or ratings on e-commerce sites were published as it is.
    • Fake and deceptive reviews: Wasteful products are highly publicised with fake reviews and praises.

    What are the standards set out by the govt.?

    The framework for the standard was prepared by the Bureau of Indian Standards (BIS). It is titled IS 19000:2022.  The outlines are-

    • Guiding principle: The guiding principles of the standard are integrity, accuracy, privacy, security, transparency, accessibility and responsiveness.
    • Voluntary compliance: To start with voluntary, the standard could become mandatory after observing compliance to the standards by such platforms.
    • Grievance redressal: Once made mandatory, a consumer may submit grievances to the National Consumer Helpline, Consumer Commissions, or the CCPA, against misleading reviews.
    • Punishment: If made mandatory, the violation of the standard, can invite punishment for unfair trade practice or violation of consumer rights.
    • Review authentication: The standard prescribes specific responsibilities for the review author and the review administrator. For the review author, these include confirming acceptance of terms and conditions, providing contact information.
    • Consumer data protection: For review administrator, these include safeguarding personal information and training of staff.
    • Traceability and genuineness of the review author: The standard also provides for methods for verification of the review author through email address, identification by telephone call or SMS, confirming registration by clicking on a link, using captcha system.

    Significance of the standards

    • The standard is expected to benefit all stakeholders in the e-commerce ecosystem, that is, consumers, e-commerce platforms, sellers, etc.
    • It will help usher in confidence among consumers to purchase goods online and help them take better purchase decisions.

     

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