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[op-ed snap] Account aggregators and e-consent for credit markets

Note4students

Mains Paper 3: Economic Development| Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

From UPSC perspective, the following things are important:

Prelims level: Basic knowledge of Public credit registry (PCR).

Mains level: The news-card analyses the issues and challenges in the establishment of a public credit registry (PCR), in a brief manner.


Context

  • There has been demand by experts for the establishment of a public credit registry (PCR) in India.
  • According to them, building a robust and centralized credit information system will be able to bring transparency to the credit market that will allow borrowers to build up their “reputational collateral”, reward good borrowers and encourage credit discipline.

Issue with credit information system in India

  • India has a multiplicity of credit information repositories.
  • As a result, it is very difficult for lenders to form a comprehensive view of the indebtedness of potential borrowers as their credit information is dispersed across multiple entities.
  • Additionally, as the formats in which the data is required to be reported to each of these entities varies widely, there is no assurance about the quality of the data, even if it were to be aggregated.

Public Credit registry would remove these inconsistencies

  • A PCR that operates as the single point of mandatory reporting of credit information, would remove these inconsistencies.
  • And leading to improvements in data quality and offering a mechanism by which borrowers of all levels can establish the reputational collateral that is needed.
  • It would additionally allow lenders to distinguish between different types of borrowers, avoiding the pitfall of adverse selection where lenders overcharge low-risk borrowers and undercharge high-risk borrowers simply because they don’t have accurate data.

Establishing PCR: only one part of the solution

  • A registry of credit gives lenders an accurate snapshot of only the indebtedness of a borrower.
  • It provides no information as to that person’s financial assets.
  • In determining whether or not to grant a loan, lenders need to evaluate both the existing debt burden of the individual as well as the details of her financial asset portfolio to assure themselves that she will be able to service the loan.
  • At present, lenders meet this second requirement by asking for copies of bank statements and other financial assets of the borrower and then physically verifying the copies presented to them against original records.
  • The process is time-consuming and runs the risk of fraud.
  • What is required is a trusted, electronic system through which borrowers can provide lenders with verifiable information about their financial assets in an auditable, electronic format that is both accurate and up to date.

RBI’s Account aggregator infrastructure

  • It is with this in mind that the Reserve Bank of India is establishing the account aggregator infrastructure.
  • It is a digital architecture that offers borrowers a mechanism by which potential lenders can view their financial assets without compromising privacy and confidentiality.
  • Central to this construct is the account aggregator, a regulated third-party entity whose sole function will be to maintain and operate a trusted platform on which registered users can link details of their financial accounts, such as bank accounts, mutual funds and insurance accounts.

How this will work?

  • Whenever potential lenders need evidence of the financial assets of a potential borrower, they will have to issue an electronic request setting out details of the data sought and the purpose for which it will be used.
  • To limit the risk of over-consenting, lenders will only be able to request limited information for specified purposes using templates that have been designed keeping in mind principles of data minimization and purpose limitation.
  • Once this request has been received, the borrower can digitally consent to the specific request, thereby authorizing the account aggregator to extract the relevant information from the financial asset portfolio that has been linked.
  • Based on the authority of the digital consent artefact, the account aggregator will instruct the relevant financial institutions to issue digitally signed copies of the required information to the lender.

Implications

  • Some experts have aversion to an over-reliance on consent as a mechanism to safeguard privacy.
  • However, the electronic consent artefact contemplated in the account aggregator framework is not the same as the over-broad, confusingly worded terms of service that we most frequently encounter.
  • It is, to the contrary, a specific, one-time request for limited information, intended to be used for a clearly defined purpose.
  • As such, consent deployed in this manner is highly unlikely to be misconstrued and, as only a limited amount of data is provided, the risk of misuse is contained
  • As much as this construct achieves the objective of purpose limitation, there is no way to ensure that once financial data has been provided, the recipients will only use it for the purposes for which it was requested.

Conclusion

  • At present, there is no technological construct by which the data that has been provided using the account aggregator framework will automatically expire once its original purpose has been served.
  • Nothing stops lenders from retaining, and using, data long after its purpose is served.
  • It is for this reason that the account aggregator architecture needs to be firmly ensconced within an extended regulatory framework that imposes restrictions over and above that which is contained within the technological framework of the consent artefact.
  • While technology offers new means by which results can be achieved, it is critically important that we remember to ground these solutions in appropriately robust legal frameworks.
Capital Markets: Challenges and Developments

[op-ed snap] Waste-to-Energy plants that use solid waste as feedstock pose threat to environment

Note4students

Mains Paper 3: Environment | Conservation, environmental pollution and degradation, environmental impact assessment.

From UPSC perspective, the following things are important:

Prelims level: Basic knowledge of Waste to Energy plants.

Mains level: The news-card analyses issues and challenges with Waste to Energy plants in India, in a brief manner.


Context

  • Waste to Energy (WtE) plants in our cities, using inadequately segregated municipal waste as feedstock, are highly dangerous because of the toxic gases and particulates they spew when they burn mixed waste in the process of incineration.

The Okhla WtE Plant Case

  • Residents of Okhla and surrounding areas in Delhi have been protesting that the WtE plant in their vicinity is not complying with the stipulations of National Green Tribunal (NGT).
  • It is not too much for an urban locality with houses, hospitals, schools and shops to want no industrial polluter in their midst.
  • With its location within 30 metres of the residential areas, emissions remain a major issue with the residents.
  • The plant was slapped a fine of Rs 25 lakh in February 2017 by the NGT but many questions about air quality standards in the area remain unanswered, including why the plant spews soot and ash in the neighbourhood.

Latest Protest

  • The authorities are considering the expansion of this WtE plant from 16 MW to 40 MW.
  • The latest protests by the residents at a public hearing were reported in the press only a few days ago.
  • The residents claim that the plant’s original Environmental Impact Assessment (EIA) issued to IL&FS bears no resemblance to the plant now in operation.
  • A new EIA has been filed for the proposed expansion, and they are apprehensive about the proposal to add two boilers.

WtE Plants in India: Lazy solution to solid waste management

  • There are five municipal WtE plants operational in India with a total capacity to produce 66.4 MW electricity per day.
  • Of this, the lion’s share — 52 MW per day — is generated in Delhi by its three existing plants.
  • There is also talk of setting up a new WtE plant with a capacity of 25 MW at Tehkhand in South-East Delhi.
  • The bandwagon is rolling on with cities across different states vying for WtE plants as a quick and lazy solution to the complex challenge of solid waste management.

Issues with WtE Plants

  1. WtE plants in India burn mixed waste
  • The presence of chlorinated hydrocarbons like PVC results in the release of dioxins and furans when the waste is burnt at less than 850 degree C.
  • Appropriate filtering mechanisms need to be installed to control such dangerous emissions.
  • Dioxins and furans are known to be carcinogenic and can lead to impairment of immune, endocrine, nervous and reproductive systems.

2. They are extremely difficult and costly to measure, as the experience of Okhla shows.

  • In the past, joint inspections involving the residents have shown that the plant was being operated without the adequate use of activated charcoal to filter out dioxins, furans and mercury from the emissions.

3. Serious pollutants of air and water

  • Even when incineration takes place under optimal conditions, large amounts of flue gases, mercury vapour and lead compounds are released.
  • There is always about 30 per cent residue from incineration in the form of slag (bottom ash) and fly ash (particulate matter), which are also known to be serious pollutants of air and water.

WtE plants are being phased out in the West

  • Even people living in the neighbourhood of the best-maintained plants in the West are said to be prone to higher levels of cancer and other illnesses.
  • That is why WtE plants are being phased out in the West.
  • Unfortunately, while the clamour for WtE plants is growing in India, their operations are neither strictly maintained nor adequately monitored.

4. Inefficient in generating energy

  • WtE plants in India are also inefficient in generating energy.
  • Municipal waste in India has a very high biodegradable (wet) waste content ranging anywhere between 60 and 70 per cent of the total, compared with 30 per cent in the West.
  • This gives our waste a high moisture content and low calorific value.
  • Also, since Indian households have traditionally been recycling their waste such as paper, plastic, cardboard, cloth, rubber, etc, to kabadiwalas, this further lowers the calorific value of our waste.

Challenge of segregation at source

  • India’s Solid Waste Management policy requires that wet and dry wastes should not be mixed so that only non-compostable and non-recyclable wastes with at least 1,500 kcal/kg should reach WtE plants.
  • Such waste comprises only 10 to 15 per cent of the total waste.
  • The challenge of segregation at source is compounded by the municipal governments themselves when they use compacters to reduce the transport cost of the waste.
  • Compacting compresses the waste and makes even gross segregation at the plant site impossible.
  • In the absence of adequate feedstock of non-compostable and non-recyclable waste, it becomes necessary to use auxiliary fuel, adding to the cost of operating the plants.

Waste to energy solutions

  • Private companies (mostly foreign) are keenly hawking “waste to energy solutions” to handle our growing volumes of urban waste.
  • Our urban local bodies, which bear the responsibility for solid waste management in our cities, are easily misguided into adopting these “solutions”.
  • They are themselves reluctant to make an effort at keeping wet and dry wastes, recyclable and non-recyclable wastes, unmixed.
  • They find WtE plants an easy option to legitimise the burning of mixed waste.

Way Forward

  • Municipal authorities should be made aware that WtE technologies are being phased out in the West.
  • They should not be allowed unless the waste offered meets the criterion specified by the SWM Rules 2016.
  • A crucial element of enforcement will be to first ensure that the waste is not mixed at the source of generation and then that the handling of waste is in unmixed streams.
  • Even where outsourcing contracts clearly specify that handling must be in unmixed streams, there should be strict penalties for non-compliance.
  •   WtE plants using municipal solid waste from Indian cities as feedstock pose a serious threat to our health and environment.
  • We must explore low cost options such as composting and bio-methanation.
  • First things first: No mixing of waste at the point of generation.
Waste Management – SWM Rules, EWM Rules, etc

[op-ed snap] Think universal basic capital

Note4students

Mains Paper 3: Economy | Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

From UPSC perspective, the following things are important:

Prelims level: Basic knowledge Universal Basic Capital.

Mains level: The news-card analyses the issue that a simplistic universal basic income will not solve the fundamental problems of the Indian economy, in a brief manner.


Context

  • India’s GDP is growing quite well. However, India needs to do much better to improve overall human development, in which it continues to be compared with countries in Sub-Saharan Africa.

Growth must trickle down

  • Even India’s poorer sub-continental neighbours are improving health and education faster.
  • Benefits of India’s economic growth must trickle down much faster to people at the bottom of the pyramid: to poorer farmers, landless rural labour, and hundreds of millions of workers living on the edge in low-paying, ‘flexible’ forms of employment with no social security.
  • Economists seem to be offering three solutions to the economy’s structural problems:

(a) that there is no problem.

(b) more privatisation.

(c) a universal basic income (UBI) to be provided by the state.

Ground still to be covered

  • Many economists are juggling with statistics to prove that the Indian economy is doing quite well.
  • According to them, it is providing enough jobs and statistically, poverty has reduced a lot.
  • However, a lot more must be done to improve education and health care.
  • And to address the persistent informality and small scale of enterprises that are providing most of the employment in the country.
  • An ideological solution that the government is unable to provide them is more privatisation of public services.
  • However, the private sector is structurally not designed to provide affordable public services equitably.
  • Businesses run with a profit motive. They cannot take on the burden of subsidising citizens who cannot pay for their services.

Increasing economic inequalities and basic income

  • Structural forces within the global economy have been driving down wages and creating insecure employment while increasing the mobility of capital and increasing incomes from ownership of capital.
  • ‘Industry 4.0’, which has not yet spread too far, is expected to worsen these problems.
  • An economic consequence of declining growth of wage incomes will be reduction of consumption.
  • Which will create problems for owners of capital and automated Industry 4.0 production systems.
  • For, no one will buy all the material and services that these systems will produce.
  • Therefore, the UBI has appeared as a silver bullet solution.
  • It will be an income provided to everybody by the very state that the capitalists say should get out of their way, and to whom they are unwilling to pay more taxes.

Proponents for basic income

  • The beauty of a ‘universal’ basic income is that it avoids messy political questions about who deserves assistance.
  • It also side-steps the challenge of actually providing the services required: education, health, food, etc.
  • Just give the people cash and let them buy what they need.
  • However, if the cash will not provide citizens with good quality and affordable education and health, because neither the government nor the private sector is able or willing to, this will not solve the basic human development problems that must be solved.

Quasi-universal basic rural income

  • Some economists who were proponents of UBI have now begun to dilute their simplistic concept of UBI to make it financially and politically feasible.
  • They propose a QUBRI (quasi-universal basic rural income), targeted only at poorer people in the rural areas.

Limitations of QUBRI

  • The scheme is no longer universal.
  • It will exclude the not-so-poor in rural areas as morally it should.
  • Political questions about who should be included will have to be addressed.
  • It will not cover the masses of urban poor working for low and uncertain wages.
  • Therefore, some other schemes will have to be drawn up for the urban sector, and entitlement and measurement issues will have to be addressed for these schemes too.
  • All the schemes (rural and urban) could be cash transfer schemes, which Aadhar and the digitisation of financial services will facilitate.
  • However, this still begs the question about how to provide good quality public services for people to buy.

Strengthening of institutions of the state

  • A simplistic UBI will not solve the fundamental problems of the economy
  • An unavoidable solution to fix India’s fundamental problems is the strengthening of institutions of the state to deliver the services the state must (public safety, justice, and basic education and health), which should be available to all citizens regardless of their ability to pay for them.
  • The institutions of the state must be strengthened also to regulate delivery of services by the private sector and ensure fair competition in the market.
  • The building of state institutions, to deliver and to regulate, will require stronger management, administrative, and political capabilities.

An alternative approach: Universal Basic Capital

  • A better solution to structural inequality than UBI is universal basic capital (UBC) which has begun to pop up in international policy circles.
  • In this alternative approach, people own the wealth they generate as shareholders of their collective enterprises.
  • Amul, SEWA, Grameen, and others have shown a way.
  • Some economists go further and also propose a ‘dividend’ for all citizens, by providing them a share of initial public offerings on the stock market, especially from companies that use ‘public assets’, such as publicly funded research, or environmental resources.

Way Forward

  • Three better solutions to create more equitable growth than the ones on offer are:

(a) Focus on building state capacity beginning with implementation of the recommendations of the Second Administrative Reforms Commission.

(b) Strengthen the missing middle-level institutions for aggregation of tiny enterprises and representation of workers.

(c) The creativity of economists could be better applied to developing ideas for UBC than UBI.

Issues related to Economic growth

Project Cosmic Microwave Background-Bharat

Note4students

Mains Paper 3: Science & Technology | Achievement of Indians in science & technology

From UPSC perspective, the following things are important:

Prelims level: CMB

Mains level: CMB-Bharat will be path breaking project along with various ongoing projects such as LIGO etc.


News

  • CMB stands for Cosmic Microwave Background, and the scientific space project CMB-Bharat has been presented as a proposal to ISRO and is under consideration.
  • In the workshop, project CMB-Bharat, which could help us listen to the faintest murmurs of the early universe, was discussed.

CMB-Bharat

  1. CMB-Bharat is a proposal for comprehensive next generation Cosmic Microwave Background (CMB) mission in international collaboration with major Indian contribution.
  2. This referred to quantum gravitational waves, which are different from what LIGO detectors had observed that were classical in nature.

What CMB actually means?

  1. The cosmic microwave background (CMB) is thought to be leftover radiation from the Big Bang, or the time when the universe began.
  2. As the theory goes, when the universe was born it underwent a rapid inflation and expansion.
  3. The universe is still expanding today, and the expansion rate appears different depending on where you look.
  4. The CMB represents the heat left over from the Big Bang.
  5. We can’t see the CMB with your naked eye, but it is everywhere in the universe.
  6. It is invisible to humans because it is so cold, just 2.725 degrees above absolute zero (minus 459.67 degrees Fahrenheit, or minus 273.15 degrees Celsius.)
  7. This means its radiation is most visible in the microwave part of the electromagnetic spectrum.

Way Forward

  1. CMB-Bharat mission presents an unique opportunity for India to take the lead on prized quests in fundamental science in a field that has proved to be a spectacular success.
  2. However there are no active proposals for a comprehensive next generation CMB space mission at this time.
Promoting Science and Technology – Missions,Policies & Schemes

First Captive Elephant Survey

Note4students

Mains Paper 3: Environment | Conservation, environmental pollution and degradation, environmental impact assessment

From UPSC perspective, the following things are important:

Prelims level: Highlights of the MoEFCC Survey on Elephant

Mains level: Man-Animal Conflict


News

  • The details of the first survey of captive elephants in the country were submitted in an affidavit by the MoEFCC to the Supreme Court.
  • The affidavit comes in the wake of rising elephant deaths and human-elephant conflicts, particularly in Kerala and Assam.

In Total

  1. According to the affidavit, there are 2,454 elephants in captivity, of which 560 are in possession with forest departments and 1,687 with private individuals.
  2. However, 664 of the total captive elephants in the country are without ownership certificate while there are 85 in zoos, 26 in circuses and 96 in temples.

Statewise Details

  1. The affidavit covers data for 28 states and Union Territories.
  2. It shows that Assam and Kerala account for more than half the nationwide total of 2,454.
  3. Assam has 37% of these captive elephants and Kerala has 21%.
  4. Concentration in two states means a wide gap with the count in other states — the third highest is Karnataka’s 184, roughly one-fifth of Assam’s 905 and a little over one-third of Kerala’s 518.
  5. Of these, one-third are in private custody without any ownership certificate mandated by law; zoos, circuses and temples account for 207 elephants in captivity.

Why such Survey?

  1. In Nov 18, the Court had pulled up the Animal Welfare Board of India (AWBI) for not having data on the number of elephants held captive.
  2. The apex court had directed the MoEFCC to identify elephants in captivity and whether their owners have an ownership certificate.
  3. It was hearing a writ petition filed by Wildlife Rescue and Rehabilitation Centre.
  4. The bench has now directed the Chief Wildlife Wardens of states to ascertain the age of all the captive elephants.
Wildlife Conservation Efforts

Indian students to participate in PISA 2021

Note4students

Mains Paper 2: Governance | Issues relating to development & management of Social Sector/Services relating to Health, Education, Human Resources

From UPSC perspective, the following things are important:

Prelims level: PISA, OCED

Mains level: Competency of Indian Education System in the World.


News

  • The HRD Ministry has signed a pact with the Organisation for Economic Cooperation and Development (OECD) for the participation of students from Central government schools in PISA-2021.
  • With the signing of the pact, Indian students aged 15 will be able to take the Programme for International Student Assessment or PISA, which is conducted every three years.

PISA 2021

  1. It will be a competency-based test, which evaluates the learning level of 15YO students in reading, mathematics and science.
  2. The outcomes of the test will be used to do more teacher training programmes and curricular reforms.
  3. The questions in the test will be contextualized according to the Indian setting to help students understand them better.
  4. Schools run by Kendriya Vidyalaya Sangathan (KVS), Navodaya Vidyalaya Samiti (NVS) and schools in the UTs of Chandigarh will participate.
  5. The CBSE and NCERT will be part of the process and activities leading to the actual test.

For detailed news (covered on 8th Sept, 2018), navigate to:

India agrees to end PISA boycott, to participate in 2021

Primary and Secondary Education – RTE, Education Policy, SEQI, RMSA, Committee Reports, etc.

New Delhi superbug gene reaches the Arctic

Note4students

Mains Paper 2: Governance | Issues relating to development & management of Social Sector/Services relating to Health, Education, Human Resources

From the UPSC perspective, the following things are important:

Prelims level: blaNDM-1

Mains level:  Tackling the outbreak of such deadly superbugs


News

  • In a significant find in the global spread of multi-drug resistant (MDR) bacteria, scientists have found a “superbug” gene — first detected in New Delhi over a decade back — in one of the last “pristine” places on Earth that is some 12,870 km away.
  • A 70-year-old US woman has died in 2016 because of the superbug NDM-1.

Superbug blaNDM-1

  1. Soil samples taken in Svalbard — a Norwegian archipelago between mainland Norway and the North Pole — have now confirmed the spread of blaNDM-1 (called New Delhi Metallo-beta-lactamase-1) into the High Arctic.
  2. The blaNDM-1 and other ARGs were found in Arctic soils that were likely spread through the faecal matter of birds, other wildlife and human visitors to the area.
  3. This Antibiotic-Resistant Gene (ARG), originally found in Indian clinical settings, conditionally provides multi-drug resistance (MDR) in microorganisms, a/c to the research.
  4. British scientists later found the “superbug” in New Delhi’s public water supply.
  5. Since then, the resistant gene has been found in over 100 countries, including new variants.
Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

India can’t handle more tigers, say experts

Note4students

Mains Paper 3: Environment | Conservation, environmental pollution and degradation, environmental impact assessment

From UPSC perspective, the following things are important:

Prelims level: Findings of the survey

Mains level: Tiger conservation in India


News

  • With increasing tiger count in India, global experts and officials in the government suggest that India must also prepare for a new challenge — of reaching the limits of its management capacity.

What do numbers say?

  1. Officially, India had 2,226 tigers as of 2014.
  2. An ongoing census is expected to reveal an update to these numbers.
  3. But experts from the Global Tiger Forum, said that India’s current capacity to host tigers ranged from 2,500-3,000 tigers.

Signs of Mismanagement

  1. 25-35% of India’s tigers now lived outside protected reserves.
  2. With dwindling core forest as well as the shrinking of tiger corridors, there are several challenges — alongside the traditional challenges of poaching and man-animal conflict.
  3. Recent attempts at translocating tigers to unpopulated reserves, such as Satkosia in Orissa, have ended badly, with one of the tigers dying.

Way Forward

  1. When tiger recovery efforts began 50 years ago we had about 2,000 tigers.
  2. If after all this effort and expenditure, we are satisfied with just 3,000 tigers, it points at a serious management problem.
  3. Needlessly huge amount of money is being dumped repeatedly on the same 25,000-30,000 sq. km area where tigers are already at saturation densities.
  4. However other areas with potential for future recovery are starved of key investments.
  5. There are vast tracts of potential tiger habitat that can be used to improve prey density, develop tiger corridors and therefore support a much larger population.

Facts for Prelims

  1. Since 2006, the WII has been tasked with coordinating the tiger estimation exercise.
  2. The once-in-four-years exercise calculated, in 2006, that India had only 1,411 tigers.
  3. This rose to 1,706 in 2010 and 2,226 in 2014 on the back of improved conservation measures and new estimation methods.

International Stock Taking Conference on Tiger Conservation

  1. The 3rd Stock Taking Conference on Tiger Conservation was recently inaugurated in New Delhi.
  2. Third in a series of Stock Taking Conferences, this is the second to be held in India after 2012.
  3. The conference is being hosted by the National Tiger Conservation Authority, MoEFCC in close collaboration with the Global Tiger Forum.
  4. Barring China, all other tiger-range countries — Thailand, Laos, Vietnam, Cambodia, Russia, Indonesia, Malaysia, Bangladesh, Bhutan, Myanmar, India and Nepal — were part of the conference in New Delhi.
  5. The member countries have signed a declaration to double tiger numbers by 2022.
Tiger Conservation Efforts – Project Tiger, etc.