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October 2019

Blockchain Technology: Prospects and Challenges

[op-ed snap] The IMF should take over Libra and make the most of the idea


From UPSC perspective, the following things are important :

Prelims level : Libra

Mains level : A new currency system


The Libra Association is fragmenting. Visa, Mastercard, PayPal, Stripe, Mercado Pago and eBay have abandoned the Facebook-led corporate alliance underpinning Libra.


  • It is the asset-backed cryptocurrency meant to revolutionize international money.
  • Anyone with a mobile phone would be able to buy Libra tokens with domestic currency by standard methods such as debit cards and online banking. 
  • Those tokens could then be used to make payments to other Libra users, whether to purchase goods and services or repay debts. 
  • To ensure full transparency, all transactions would be handled by blockchain technology. 
  • In sharp contrast to Bitcoin, Libra tokens would be fully backed by copper-bottomed assets.

Financial mechanism 

  • To anchor Libra to tangible assets, the association backing it promised to use its revenues, along with the seed capital contributed by its member companies to buy highly liquid, highly rated financial assets. 

Challenges with Libra

  • Privatising – Humanity would have suffered if Facebook is allowed to use Libra to privatize the international payments system. The sole beneficiary would be the Libra Association, which would collect tremendous interest income on the assets from around the world using the large portion of global savings on its platform. 
  • Too big – Libra association would soon advance credit to individuals and corporations, graduating from a payments system to a global bank that no government could ever bail out, regulate or resolve.
  • Out of financial system – 2.4 billion monthly active Facebook users would suddenly have a new currency allowing them to transact with one another and bypass the rest of the financial system.
  • Criminal misuse – There is every possibility for high potential criminal uses of Libra. 
  • Volatility issues – Countries have invested a lot in minimizing the volatility of the purchasing power of domestic money. As a result of those efforts, 100 euros or dollars buy today more or less the same goods that they will buy next month. But the same could not be said of 100 euros or dollars converted into Libra.
  • Business cycles – Since the 2008 financial crash, authorities have struggled to manage inflation, employment and investment with the fiscal and monetary levers. Libra would further diminish states’ capacity to smoothen the business cycle. 
  • Fiscal policy challenge – Fiscal policy’s efficacy would suffer as the tax base shrinks with every payment shifting to a global payments system residing within Facebook. 
  • Impact on monetary policy – Central banks manage the quantity and flow of money by withdrawing or adding paper assets to the stock held by private banks. The more successful Libra becomes, the more money people will transfer from their bank account to their Libra wallet and the less able central banks will be to stabilize the economy.

Potential of Libra – to the IMF

  • The core concept of Libra can be handed over to the International Monetary Fund (IMF).
  • It can be used to reduce global trade imbalances and rebalance financial flows. 
  • A Libra-like cryptocurrency could help the IMF fulfil its original purpose.
  • Entrust implementation of the idea to the IMF to reinvent the international monetary system in a manner reflecting John Maynard Keynes’ rejected proposal at the 1944 Bretton Woods Conference for an International Clearing Union.
  • IMF would issue a blockchain-based, Libra-like token, say Kosmos, whose exchange rate with domestic currencies floats freely. 
  • People continue to use their domestic currency, but all cross-border trade and capital transfers are denominated in Kosmos and pass through their central bank’s account held at the IMF. 
  • Trade deficits and surpluses incur a trade-imbalance levy, while private financial institutions pay a fee in proportion to any surge of outward capital flows. 
  • All international transactions become frictionless and fully transparent.
  • Small but significant penalties keep trade and capital imbalances in check and fund green investment and remedial North-South wealth redistribution.

Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

[op-ed snap] Put away the stick


From UPSC perspective, the following things are important :

Prelims level : Fertility rate

Mains level : Population control - challenges


On Tuesday, the Assam government announced that people with more than two children will not be eligible for government jobs from January 2021. 

Two child norm for jobs

  • Assam will become the fourth state after Maharashtra, Madhya Pradesh and Rajasthan to have a two-child norm in place for government jobs.
  • At least five other states follow this norm for candidates seeking elections to local bodies such as panchayats, municipal corporations and zila parishads. 

Limitations of the two-child norm

  • Measures such as debarring people from holding government office amounts to penalising weaker sections of the population.
  • Women’s reproductive choices are often subject to a variety of constraints. 
  • The two-child policy is discriminatory in nature.
  • Almost all surveys indicate that India’s population growth rate has slowed substantially in the last decade. 
  • According to the NFHS-4, at 2.2, India’s total fertility rate (TFR) is very close to the desired replacement level of 2.1.
  • NFHS-4 figures on contraception point to the unmet need for contraception. It stands at 13% — over 30 million women of reproductive age are not able to access contraception. 

Fertility rate

  • NFHS-4 data confirms that women’s education has a direct bearing on fertility rates.
  • The decadal survey shows that women who have never been to school are likely to bear more than three children while the fertility rate of those who have completed 12 years of schooling is 1.7.

Population growth

  • In spite of the fall in TFR, India’s population has continued to grow.
  • This is because nearly 50% of the people are in the age group of 15-49. 
  • This means that the absolute population will continue to rise even though couples have less children.

What needs to be done

  • Further slowing down of the momentum will require raising the age of marriage, delaying the first pregnancy and ensuring spacing between births. 
  • Dealing with the country’s demographic peculiarity will require investments in health, education, nutrition and employment avenues.


State governments should rethink throttling rights to enforce population control.




Police Reforms – SC directives, NPC, other committees reports

[op-ed snap] The law isn’t enough


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Limitations of a law against lynching


The absence of figures relating to incidents of lynching in the recently released NCRB database on the pretext that the data received from the states were “unreliable” hints at a deliberate attempt to keep the figures under wraps.

Lynching data

  • Figures available from various other sources indicate that in 63 incidents, 28 persons were killed between 2010 and 2017, of which 24 were Muslims.
  • There have been 266 cases of lynching since 2014 and this continues to show an upward trend.

Role of police

  • In some incidents, the police have been part of the lynching mob.
  • Police has played a partisan role in most incidents of lynching. There have been cases where policemen acted promptly and prevented incidents of lynching. 

Law against lynching

  • The Supreme Court has directed the Centre and all states to frame stringent laws against lynching. 
  • Manipur passed an anti-lynching law last November. Rajasthan and West Bengal have passed such legislation more recently.
  • West Bengal’s law is stringent, punishing with death those held guilty of lynching victims to death. 

Limitations of law

  • Laws will be futile unless they are strictly enforced on the ground. 
  • Political patronage to fundamentalist elements will deter the policemen from doing their duty.

Other corrective steps needed

  • Uttar Pradesh State Law Commission has stressed the need to take stringent action against officials for dereliction of their duties. 
  • The district magistrate and police officers can be imprisoned for a term extending upto three years with a fine upto Rs 5000.
  • Monitoring fake news and arresting those who originate and forward news that could trigger mob violence or communal unrest.
  • The police has to spread its intelligence dragnet such that any plan to upset the law and order machinery is reported to the control room within minutes. 
  • Districts that are communally sensitive ought to have additional armed and well-equipped companies to rush to any spot within minutes to handle frenzied mobs.
  • Prompt investigations into incidents of mob lynching should be followed by arrests and trial by fast track courts.
  • The police should protect the witnesses and the victims. 
  • Lynching must be made a non-bailable offence. 
  • Policemen who watch as mute spectators should also be tried in the same manner as the culprits. Senior police officers also need to be taken to task if found guilty of dereliction of duty.

Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

Explained: Why the govt wants to change the definition of MSMEs


From UPSC perspective, the following things are important :

Prelims level : MSME definition

Mains level : MSME sector reforms

  • It has been reported that the government will soon change the way it defines the micro, small and medium enterprises (MSMEs).

A move for single definition

  • The government would consider shifting to a “single definition” of MSMEs. The change in definition would require an amendment to the MSME Development Act.
  • The Union Cabinet had decided to shift from a criterion of classifying MSMEs based on ‘investment in plant and machinery’ to a criterion based on ‘annual turnover’.

What is the importance of the MSME sector?

  • According to a RBI report, the MSMEs are amongst the strongest drivers of economic development, innovation and employment.
  • Looking back at data since 2000-01, MSME sector growth has almost every year outstripped overall industrial growth in the country.
  • The MSME sector also contributes in a significant way to the growth of the Indian economy with a vast network of about 63.38 million enterprises.
  • The sector contributes about 45% to manufacturing output, more than 40% of exports, over 28% of the GDP while creating employment for about 111 million people, which in terms of volume stands next to agricultural sector.
  • However, the RBI report also noted that at present the sector is “exceedingly heterogeneous in terms of size of the enterprises and variety of products and services, and levels of technology employed” .
  • It has the potential to grow at a much faster rate. One of the key attractions of this sector is that it huge employment generation potential at relatively lower capital investment.

How are MSMEs defined at present?

  • There has been no uniformity over the years about the definition of what exactly one means by “small scale industries” in India.
  • Moreover, the definition also changes from one country to another.
  • In India, for instance, under the Industrial Development and Regulation (IDR) Act, 1951, small industries were conceived in terms of “number of employees”.
  • But it was found that obtaining reliable data on the number of employees was difficult.
  • As such, a proxy was found – and this was to look at the investments in plant and machinery; it was relatively easy to reliably ascertain and verify this data.
  • So at present, the classification of MSMEs is done based on investment in plant & machinery/equipment (see table) in accordance with the provision of Section 7 of the MSMED Act, 2006.

Classification of MSMEs in India at present

How do others define MSMEs?

  • According to the World Bank, a business is classified as an MSME when it meets two of the three following criteria: employee strength, assets size, or annual sales.
  • According to a 2014 report, as many as 267 definitions were used by different institutions in 155 economies.
  • But the most widely used variable for defining an MSME was the number of employees — 92% of the institutions use this.
  • Other definitions were based on turnover as well as the value of assets (49% and 36%, respectively).
  • Around 11% used other variables like loan size, formality, years of experience, type of technology, size of the manufacturing space, and initial investment amount etc.
  • The crucial thing, however, is that most of the countries used only one variable to define MSMEs.

How does a change in definition help?

  • Definitions based on investment limits in plant and machinery/ equipment were decided when the Act was formulated in 2006.
  • But such a definition “does not reflect the current increase in price index of plant and machinery/equipment,” stated the RBI report.
  • Moreover, MSMEs, thanks to their small scale of operations and informal organisation, MSMEs don’t always maintain proper books of accounts. This essentially results in their not being classified as MSMEs.
  • The change of definition is likely to improve the ease of doing business for MSMEs, and in the process, make it easier for them to pay taxes, attract investments and create more jobs.
  • The clear and unambiguous definition – that is also in consonance with global norms and learns from the best practices across countries – is the starting point to reforming this crucial sector of the economy.

Wildlife Conservation Efforts

Protocol to assess Snow Leopard population


From UPSC perspective, the following things are important :

Prelims level : Global Snow Leopard and Ecosystem Program (GSLEP)

Mains level : Read the attached story

  • In a major boost towards protecting and conserving Snow Leopards MoEFCC launched the First National Protocol on Snow Leopard Population Assessment in India.

Global Snow Leopard and Ecosystem Program (GSLEP)

  • GSLEP is a high-level intergovernmental alliance of 12 snow leopard range countries.
  • They are India, Nepal, Bhutan, China, Mongolia, Russia, Pakistan, Afghanistan, Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan.
  • It has been prepared by the Wildlife Institute of India, Nature Conservation Foundation, GSLEP technical committee, Global Tiger Initiative council, World Wide Fund for Nature, World Bank, Global Tiger Forum, and Wildlife Conservation Trust.
  • Snow Leopard enumeration has been developed by scientific experts in association with the Snow Leopard States/UTs namely, Ladakh, J&K, Himachal Pradesh, Uttarakhand, Sikkim and Arunanchal Pradesh.
  • This is the first time that survey use technology such as camera traps and scientific surveys to estimate the numbers.

Conservation of Snow Leopard in India

  • Project Snow Leopard was launched in 2009 for strengthening wildlife conservation in the Himalayan high altitudes.
  • It aims at promoting a knowledge-based and adaptive conservation framework that fully involves the local communities, who share the snow leopard’s range, in conservation efforts.
  • Snow leopards are given the same protection as the tiger, listed under Schedule I of the Wildlife (Protection) Act, 1972 – the highest protection afforded to a species.

Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

Peritoneal dialysis


From UPSC perspective, the following things are important :

Prelims level : Dialysis

Mains level : National Dialysis Programme

  • The Health Ministry has released guidelines for establishing peritoneal dialysis services under the Pradhan Mantri National Dialysis Program (PMNDP).

What is Dialysis?

  • Dialysis is a treatment that filters and purifies the blood using a machine.
  • It is the process of removing excess water, solutes, and toxins from the blood in people whose kidneys can no longer perform these functions naturally.

National Dialysis Programme

  • The PM National Dialysis Programme was rolled out in 2016 as part of the National Health Mission(NHM) for provision of free dialysis services to the poor.
  • The first phase of the programme envisaged setting up of haemodialysis centres in all districts.
  • The Guidelines for National Dialysis Programme envisage provision of dialysis services under NHM in PPP (Public Private Partnership) mode.
  • It covers 2 main types of dialysis:

Hemodialysis (HD, commonly known as blood dialysis)

  • In HD, the blood is filtered through a machine that acts like an artificial kidney and is returned back into the body. HD needs to be performed in a designated dialysis centre.
  • It is usually needed about 3 times per week, with each episode taking about 3-4 hours.

Peritoneal dialysis (PD, commonly known as water dialysis)

  • In PD, the blood is cleaned without being removed from the body.
  • The abdomen sac (lining) acts as a natural filter. A solution (mainly made up of salts and sugars) is injected into the abdomen that encourages filtration such that the waste is transferred from the blood to the solution.

Why such move?

  • The move is aimed at achieving equity in patient access to home-based peritoneal dialysis; reducing the overall cost of care; and bringing in consistency of practice, pricing and a full range of product availability.
  • The guidelines aim to serve as a comprehensive manual to States that intend to set up peritoneal dialysis.
  • This move will instantly benefit the 2 lakh Indians who develop end-stage kidney failure every year in India.

Wetland Conservation

Wetland’ status for Chandigarh’s Sukhna Lake


From UPSC perspective, the following things are important :

Prelims level : Sukhna Lake

Mains level : Wetland conservation in India

  • The Chandigarh administration had issued a draft notification for declaring Sukhna Lake as a wetland under the Wetland (Conservation and Management) Rule, 2017.

Sukhna Lake

  • Sukhna Lake in Chandigarh, India, is a reservoir at the foothills (Shivalik hills) of the Himalayas.
  • This 3 km² rainfed lake was created in 1958 by damming the Sukhna Choe, a seasonal stream coming down from the Shivalik Hills.
  • Sukhna is a sanctuary for many exotic migratory birds like the Siberian duck, storks and cranes, during the winter months.
  • The lake has been declared as a protected national wetland by the Government of India.

How will the wetland status help Sukhna?

  • Declaring Sukhna a wetland will help preserve the lake and conserve its ecological and biodiversity.
  • A major threat to Sukhna is the discharge of pollutants from neighbouring areas.
  • The catchment area of Sukhna Wetland spreading over 10,395 acres as finalised by the Survey of India includes 2,525 acres of Haryana and 684 acres of Punjab.
  • With this, various activities will be prohibited/regulated/ promoted both in the wetland as well catchment areas.

Climate Change Impact on India and World – International Reports, Key Observations, etc.

Ozone hole


From UPSC perspective, the following things are important :

Prelims level : Ozone hole

Mains level : Ozone depletion and its impact on climate change

  • During September and October, the ozone hole over the Antarctic has been the smallest observed since 1982.

Shrinking ozone hole

  • The annual ozone hole reached its peak extent of 16. 4 million sq km on September 8, then shrank to less than 10 million sq km for the remainder of September and October, satellite measurements show.
  • NASA has described it as great news for the Southern Hemisphere.

Ozone hole

  • Ozone, made up of three oxygen atoms, occurs naturally in small amounts.
  • Roughly 10 km to 40 km up in the atmosphere (the layer called the stratosphere), the ozone layer is a sunscreen, shielding Earth from harmful ultraviolet radiation.
  • On the other hand, close to the surface, ozone created as a byproduct of pollution can trigger health problems such as asthma and bronchitis.
  • Manufactured chemicals deplete the ozone layer. Each spring over Antarctica (it is now spring there), atmospheric ozone is destroyed by chemical processes.
  • This creates the ozone hole, which occurs because of special meteorological and chemical conditions that exist in that region.

Why it is smallest this year?

  • There have been abnormal weather patterns in the atmosphere over Antarctica.
  • In warmer temperatures like this year, fewer polar stratospheric clouds form and they don’t persist as long, limiting the ozone-depletion process.