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  • RBI Notifications

    Digital Lending

    | Economics | Mains Paper 3: Indian Economy

    The Reserve Bank of India (RBI) has constituted a working group on digital lending to study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players.

    NPAs are rising in India. And one may find some irritating ads and texts on our smartphones, which desperately wants to disburse easy loans (that too in a limited offer period)!

    Digital Lending

    • Digital lending is the process of offering loans that are applied for, disbursed, and managed through digital channels, in which lenders use digitized data to inform credit decisions and build customer engagement.
    • It consists of lending through web platforms or mobile apps, by taking advantage of technology for authentication and credit assessment.

    Why in news?

    • The move comes in the backdrop of the three borrowers in Telangana committing suicide over alleged harassment by personnel of such digital lenders.
    • There were many more complaining of being subjected to coercive methods after defaulting on repayments.

    Why regulate Digital Lending?

    • Digital lending has the potential to make access to financial products and services more fair, efficient and inclusive.
    • From a peripheral supporting role a few years ago, FinTech-led innovation is now at the core of the design, pricing and delivery of financial products and services.
    • While penetration of digital methods in the financial sector is a welcome development, the benefits and certain downside risks are often interwoven.
    • A balanced approach needs to be followed so that the regulatory framework supports innovation while ensuring data security, privacy, confidentiality and consumer protection.

    Risks associated

    • A growing number of unauthorized digital lending platforms and mobile applications are threats to consumers.
    • Such lenders charge excessive rates of interest and additional hidden charges.
    • They adopt unacceptable and high-handed recovery methods and in turn misuse agreements to access data on mobile phones of borrowers.

    What will the working group do?

    • The RBI working group will evaluate digital lending activities and assess the penetration and standards of outsourced digital lending activities in RBI regulated entities.
    • They would thus identify the risks posed by unregulated digital lending to financial stability, regulated entities and consumers; and suggest regulatory changes to promote orderly growth of digital lending.
    • It will also recommend measures for expansion of specific regulatory or statutory perimeter and suggest the role of various regulatory and government agencies.
    • It will also recommend a robust fair practices code for digital lending players.

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  • Forest Conservation Efforts – NFP, Western Ghats, etc.

    Great Green Wall (GGW) Project

    National Parks/WS | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    The Great Green Wall (GGW) Project to address desertification, land degradation and climate change in the Sahel region of Africa has hit a new low due to funds crunch.

    Note the countries swept by the GGW project on the African map.

    GGW Project

    • The Great Green Wall project is conceived by 11 countries located along the southern border of the Sahara and their international partners, is aimed at limiting the desertification of the Sahel zone.
    • Led by the African Union, the initiative aims to transform the lives of millions of people by creating a mosaic of green and productive landscapes across North Africa.
    • The initial idea of the GGW was to develop a line of trees from east to the west bordering the Saharan Desert.
    • Its vision has evolved into that of a mosaic of interventions addressing the challenges facing the people in the Sahel and the Sahara.

    Why was such project incepted?

    • The project is a response to the combined effect of natural resources degradation and drought in rural areas.
    • It aimed to restore 100 million hectares of degraded land by 2030; only four million hectares had been restored between 2007 and 2019.
    • It is a partnership that supports communities working towards sustainable management and use of forests, rangelands and other natural resources.
    • It seeks to help communities mitigate and adapt to climate change, as well as improve food security.

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  • Tourism Sector

    Gujarat’s MICE Tourism Policy

    | Economics | Mains Paper 3: Issues relating growth and development, employment

    Gujarat CM has announced the tourism policy for 2021-25, seeking to position the state as the country’s foremost tourist destination, with a focus on investment and livelihood opportunities.

    The policy seeks to make Gujarat a hub of “MICE” tourism.

    Q. Given the vital importance of the tourism industry in the Indian economy, there is a need to address underneath challenges and adopt a suitable policy for overall growth. Discuss the need for a comprehensive National Tourism Policy.

    What is MICE tourism?

    • The acronym “MICE” stands for “Meetings, Incentives, Conferences and Exhibitions”, and is essentially a version of business tourism that draws domestic and international tourists to a destination.
    • The policy aims to make Gujarat one of the top five MICE tourism destinations in the country.

    How does the policy proposals to attract MICE tourism?

    • To incentivise international events, the government has announced an assistance of Rs 5,000 to the event organizer per foreign participant staying overnight, subject to an upper limit of Rs 5 lakh.
    • For domestic events, the policy promises financial assistance of Rs 2 lakh per event, capped at three events per organizer per year.
    • For Gujarat to emerge as a venue of big national and international conferences, large convention centres are required.
    • The policy promises special incentives for building big convention centres, including 15% capital subsidy on the eligible capital investment.
    • The government has also promised land on the lease if required.
    • A precondition to avail the incentive is that the convention centre should have at least one hall that can seat a minimum of 2,500 persons.

    Why is there a specific focus on MICE tourism?

    • MICE events are major tourism generators, and there is significant scope to tap into it.
    • By incentivizing the organising of MICE events and construction of convention centres in Gujarat, we are trying to plug the gaps.
    • The organizer of an international event can prolong the stay of guests by one or two days, and visitors can visit tourist attractions, of which Gujarat has many.

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  • Capital Markets: Challenges and Developments

    Mutual Funds Risk-o-Meter

    Prelims Only | Economics | Mains Paper 3: Indian Economy

    The capital markets regulator Securities and Exchange Board of India (SEBI) has made it mandatory for mutual funds to assign a risk level to schemes, based on certain parameters.

    Try this PYQ:

    Q.Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?

    (a) Certificate of Deposit

    (b) Commercial Paper

    (c) Promissory Note

    (d) Participatory Note

    What are Mutual Funds?

    • A Mutual Fund is a trust that collects money from a number of investors who share a common investment objective.
    • Then, it invests the money in equities, bonds, money market instruments and/or other securities.
    • Each investor owns units, which represent a portion of the holdings of the fund.
    • The income/gains generated from this collective investment are distributed proportionately amongst the investors after deducting certain expenses, by calculating a scheme’s “Net Asset Value or NAV.
    • It is one of the most viable investment options for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
    • All funds carry some level of risk. With mutual funds, one may lose some or all of the money invested because the securities held by a fund can go down in value.

    What is the risk-o-meter?

    • All mutual funds shall beginning January 1, assign a risk level to their schemes at the time of launch, based on the scheme’s characteristics.
    • SEBI’s decision on the “risk-o-meter”, characterizes the risk level of the schemes on a six-stage scale from “Low” to “Very High”.
    • The risk-o-meter must be evaluated on a monthly basis.

    A compulsory mandate

    • Fund houses are required to disclose the risk-o-meter risk level along with the portfolio disclosure for all their schemes on their own websites as well as the website of the Association of Mutual Funds in India (AMFI) within 10 days of the close of each month.
    • Any change in the risk-o-meter reading with regard to a scheme shall be communicated to the unit-holders of that scheme.

    How will the level of risk be assigned?

    • Which one of the six risk levels — low, low to moderate, moderate, moderately high, high, and very high — would apply, would depend upon the risk value (less than 1 for low risk to more than 5 for very high risk) calculated for the scheme.
    • So if the risk value of a scheme is less than 1, its risk level would be low, and if it is more than 5, the risk will be very high on the risk-o-meter.

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  • Indian Air Force Updates

    [pib] IAF to induct LCA Tejas

    PIB | Security Issues | Mains Paper 3: Various Security Forces, Agencies & Their Mandates

    The Union Cabinet has approved procurement of 73 LCA Tejas Mk-1A fighter aircraft and 10 LCA Tejas Mk-1 Trainer aircraft for Indian Air Force.

    Try this PYQ from CSP 2018:

    Q.What is “Terminal High Altitude Area Defense (THAAD)”, sometimes seen in the news?

    (a) An Israeli radar system

    (b) India’s indigenous anti-missile programme

    (c) An American anti-missile system

    (d) A defence collaboration between Japan and South Korea

    LCA Tejas

    • The Tejas is an Indian single-engine, fourth-generation, multirole light fighter aircraft.
    • It is designed by the Aeronautical Development Agency (ADA) in collaboration with the Aircraft Research and Design Centre (ARDC) of Hindustan Aeronautics Limited (HAL).
    • It came from the Light Combat Aircraft (LCA) programme, which began in the 1980s to replace India’s ageing MiG-21 fighters.
    • The indigenous content of the Tejas was 59.7% by value and 75.5% by a number of lines replaceable units.

    Which are the procured variants?

    • Light Combat Aircraft Mk-1A variant is an indigenously designed, developed and manufactured state-of-the-art modern 4+ generation fighter aircraft.
    • It is the first “Buy (Indian-Indigenously Designed, Developed and Manufactured)” category procurement of combat aircraft.

    Significance

    • Tejas enable IAF to handle repairs or servicing at their base depot so that the turnaround time would get reduced for mission-critical systems.
    • This would enable IAF to sustain the fleet more efficiently and effectively due to the availability of repair infrastructure at respective bases.
    • It will give a further push to Atmanirbhar Bharat initiative and boost indigenization of defence production and the defence industry in the country.

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  • Foreign Policy Watch: India – EU

    Europe’s China gambit will fall short of its stated goals

    | International Relations | Mains Paper 2: Effect Of Policies & Politics Of World On India’S Interests

    Thought the article is not directly related to India, the conclusion of the investment treaty between the EU and China serves as the prelude to the post-pandemic world order which surely matters for India. The article explains the implications of the agreement.

    Investment agreement between EU and China

    • Recently, the EU and China announced the completion of a Comprehensive Agreement on Investment (CAI) between the two.
    • The CAI gives European firms enhanced access to the Chinese market, removes (or relaxes) Chinese government requirements on joint ventures and technology transfer in some sectors.
    • The European Commission has claimed that the CAI allows the EU to maintain its “policy space”, especially in “sensitive” sectors such as energy, infrastructure, agriculture, and public services
    • The deal also promises equal treatment with state enterprises and greater regulatory transparency in China.
    • Moreover, the Chinese government has undertaken some obligations on environmental sustainability and labour rights, notably by agreeing to make “continued and sustained efforts” to ratify the Forced Labour Convention.

    Reaction to the agreement

    • The US reaction ranged from disappointment to outright hostility.
    • The incoming Biden administration would have preferred a unified front against China, by striking an economic deal with Europe first.
    • For others, it was the EU’s apparent misjudgement on China’s human rights promises.

    Post-pandemic world order and role of democracies

    • The Europe-China agreement underscores a fundamental question of the post-pandemic world order: Can democracies remain true to their values while engaging in trade and investment with China?
    • To answer that, we must recognize two facts.
    • First, it is impossible to decouple the economies of the West from the Chinese economy without causing an economic catastrophe.
    • Second, there is little that Western countries can do to reshape China’s state-driven economic model or repressive human- and labour-rights regime.

    What should be the approach in dealing with China

    • The West should pursue more limited, more attainable, and ultimately more defensible goals.
    • Two goals are paramount.
    • First, trade and investment rules should be such that Western firms and consumers are not directly complicit in human-rights abuses in China.
    • Second, such rules should safeguard democratic countries against Chinese practices that could undermine their domestic institutional arrangements on labour, environment, technology, and national security.

    Lack of clarity over arbitration mechanism

    • The agreement contains an arbitration scheme that enables the parties to bring violation complaints against each other.
    • Arbitration scheme could serve as a means for the Chinese government to challenge specific entry barriers against Chinese firms.
    • How much this mechanism will be sensitive towards the issues such as treatment given to workers or the environmental protection is not clear.
    • Similarly, how much deference will panels show to exceptions to market access based on “national security” considerations is not clear.

    Conclusion

    We should not judge the CAI by whether it enables Europe to export its system and values. We should judge it by whether it allows Europe to remain true to its own.

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  • Important Judgements In News

    Issues with suspension of the Farm laws

    op-ed snap | Polity | Mains Paper 2: Executive & Judiciary,Seperation Of Power

    The article deals with the recent Supreme Court order in which it suspended the implementation of the Farm Acts. This order gives rise to several issues. The article deals with these issues.

    What is the issue

    • The Supreme Court has suspended the implementation of the farm laws.
    • The court created a committee to ascertain the various grievances of the farmers.
    • But the Supreme Court has not clarified the legal basis of this suspension.

    What are the issues with the suspension?

    • The court’s action, at first sight, is a violation of separation of powers.
    • It also gives the misleading impression that a distributive conflict can be resolved by technical or judicial means.
    • It is also not a court’s job to mediate a political dispute.
    • Its job is to determine unconstitutionality or illegality.
    • Even in suspending laws there needs to be some prima facie case that these lapses might have taken place.
    • It has set a new precedent for putting on hold laws passed by Parliament without substantive hearings on the content of the laws.
    • Also in appointing the committee, the court has violated the first rule of mediation: The mediators must be acceptable to all parties and appointed in consultation with them.

    Conclusion

    The Supreme Court order has given the government a setback while not addressing the concerns of the protesting farmers. The court needs to consider these facts and mend its implications.

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  • Foreign Policy Watch: India-SAARC Nations

    Reclaiming SAARC

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    The article examines the issues are making it difficult to function and suggests its revival.

    Dysfunctional SAARC and its implications

    • The year 2020 marked the sixth year since the leaders of the eight nations that make up SAARC were able to meet.
    • India-Pakistan issues have impacted other meetings of SAARC as well.
    • Inactive SAARC is making it easier for member countries, as well as international agencies, to deal with South Asia as a fragmented group.
    • India’s refusal to allow Pakistan to host the SAARC summit is akin to giving Pakistan a ‘veto’ over the entire SAARC process.
    • The events of 2020, particularly the novel coronavirus pandemic and China’s aggressions at the Line of Actual Control (LAC) shone a new spotlight on this mechanism.
    • This should make the government review its position and reverse that trend.

    Reasons India should review its position on SAARC

    1) India attend other forums with Pakistan

    • India continued to attend Shanghai Cooperation Organisation (SCO) meetings along with their Pakistani counterparts.
    • While China’s incursions in Ladakh constituted the larger concern in the year, India did not decline to attend meetings with the Chinese leadership at the SCO, the Russia-India-China trilateral, the G-20 and others.
    • No concerns over territorial claims stopped the government from engaging with Nepal either.

    2) Pandemic caused challenges

    • Reviving SAARC is crucial to countering the common challenges brought about by the pandemic.
    • Studies have shown that South Asia’s experience of the pandemic has been unique from other regions of the world.
    • This experience needs to be studied further in a comprehensive manner in order to counter future pandemics.
    • Such an approach is also necessary for the distribution and further trials needed for vaccines, as well as developing cold storage chains for the vast market that South Asia represents.

    3) Impact of the pandemic on economies of South Asia

    • Apart from the overall GDP slowdown, global job cuts which will lead to an estimated 22% fall in revenue for migrant labour and expatriates from South Asian countries.
    • World Bank have suggested that South Asian countries work as a collective to set standards for labour from the region, and also to promoting a more intra-regional, transnational approach towards tourism, citing successful examples including the ‘East Africa Single Joint Visa’ system.
    • In the longer term, there will be a shift in priorities towards health security, food security, and job security, that will also benefit from an “all-of” South Asia approach.
    • While it will be impossible for countries to cut themselves off from the global market entirely, regional initiatives will become the “Goldilocks option”.

    4) Dealing with the China challenge

    • In dealing with the challenge from China too, both at India’s borders and in its neighbourhood, a unified South Asian platform remains India’s most potent countermeasure.
    • At the border, tensions with Pakistan and Nepal amplify the threat perception from China, while other SAARC members (minus Bhutan), all of whom are Belt and Road Initiative (BRI) partners of China will be hard placed to help individually.
    • Significantly, from 2005-14, China actually wanted to join SAARC.
    • Despite the rebuff, China has continued to push its way into South Asia.

    Conclusion

    Seen through Beijing’s prism, India’s SAARC neighbourhood may be a means to contain India, with the People’s Liberation Army strategies against India over the LAC at present, or in conjunction with Pakistan or Nepal at other disputed fronts in the future. New Delhi must find its own prism with which to view its South Asian neighbourhood as it should be: a unit that has a common future, and as a force-multiplier for India’s ambitions on the global stage.

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  • Mother and Child Health – Immunization Program, BPBB, PMJSY, PMMSY, etc.

    Paternity Leave in India

    | Indian Society | Mains Paper 1: Salient features of Indian Society

    Indian cricket captain has opted for paternity leave amidst an ongoing tournament. This has led to his criticism as well as praise for prioritizing family.

    Q.Paternity leave is one of the solutions which can help in ending the “motherhood penalty”.  Examine with context to working mothers.

    What is Paternity leave?

    • Paternity leave is a short period of leave for the father to take immediately following childbirth to help care for the child and assist the mother.
    • Parental leave is a longer period of leave granted to look after the infant child, usually after the expiration of paternity/maternity leave.

    Legal Aspects of Paternity Leave in India

    There is no specific or explicit law for paternity leave in India.

    • Maternity leave is governed by the Maternity Benefit Act, 1961 which was last amended in 2017 to enhance the period of maternity leave to 26 weeks from the previous 12 weeks.
    • The Central Civil Service (Leave Rules), 1972 allows for 15 days of paid paternity leave before childbirth or up to 6 months from the date of the delivery of the child.
    • An attempt was made to introduce a pan India legislation on paternity leave in 2017 as a private member’s bill in Lok Sabha, but it was not successful.
    • The Paternity Benefit Bill, 2017, provided for a paid leave of fifteen days which could be availed up to three months from the date when the child was born.
    • It also included an adopted child below the age of three months and applied to men in the organised i.e. private as well as unorganised sectors.

    Popular trends

    • The longest leave –– six months –– is provided by Ikea, which extends rules from home country Sweden to India.
    • Among Indian companies, Zomato made news in 2019 when it decided to give 26-week paternity leave to its employees.

    Precursors in India

    • The Central Government recently announced that male government employees who are ‘single parents’ which included widowers, divorcees, or unmarried men raising children single-handedly would now be entitled to “child care leave” (CCL).
    • Here, they would receive 100% of the leave salary for the first 365 days of leave and 80% of leave salary for the next 365 days.
    • This leave was previously only available to women employees.

    Why paternity leave matters?

    • Most working new mothers (for those who can make that choice) opt for maternity leave either just before the birth or after childbirth.
    • It paves the way for at least their temporary, and sometimes their permanent exit from the workplace.
    • On the other hand, not many fathers experience much difference in their employment and workplace situation after their child is born, which may either be voluntary by not taking time off or involuntary.
    • This structural difference is one of the key components that influence gender dynamics both in the workplace and at home.

    The gender dynamics behind

    • Lack of paternity leave not only robs new fathers of the crucial chance to bond with their newborn child but also reinforces women’s role as the primary caregiver and underpins the belief that child care is predominantly the mother’s job.
    • Paternity leave is a way to directly address the gender dynamic that prevails both at the workplace and at home.
    • The undue burden of childcare that is placed on women at home is bound to and does, spill over into their workplace and professional lives.
    • The natural effect of it is that it puts hurdles across women’s careers and might slow their growth prospects while some women might choose to quit altogether.

    Way forward

    • By only having maternity leaves and not giving due consideration to paternity leave, the stereotype that women belong at home, taking care of children is reinforced.
    • By no means is the introduction of paternity leave a panacea for gendered workplaces, but it will be a significant step in combating and overcoming stereotype.
    • For India, a decent way to begin would be to have a national policy on paternity leave that would include all fathers and would apply irrespective of whether they worked in the organised or unorganised sectors.
    • Shifting from a purely maternity oriented care framework to a parental care framework which would involve both parents would be beneficial for all stakeholders and is what we need today.

    Conclusion

    • A major benefit that accrues from paternity leave is that it eases pressure and stigma from women at the workplace, as they no longer are the only ones who are taking leave for child care purposes.
    • Paternity leave is also one of the solutions which can help in ending the “motherhood penalty”.
    • The motherhood penalty is a term that describes the disadvantages that women with children face as compared to women who don’t in workplaces.
    • Fathers need to be active co-parents and not just helpers to their female partners/wives.
    • And for ones with feminist’s perspectives, they should not look paternity leave as a sole vacation for men.

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  • Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

    Who are the persecuted Hazara Community of Pakistan?

    IOCR | International Relations | Mains Paper 2: India & Its Neighborhood – Relations

    Pakistan’s Hazaras finally ended a protest and agreed to bury the bodies of 11 coal miners from the community killed by the IS.

    Genocide and Pakistan are the two inseparable metaphors. Pakistan’s treatment of its minorities is the least highlighted global violation of Human Rights. Hindus, Sikhs and Christians are the most persecuted communities.

    Who are the Hazaras?

    • Around 1773, the mountainous region of Hazarajat in modern-day central Afghanistan was annexed and made a part of the territories of the Afghan Empire under Pashtun ruler Ahmad Shah Durrani.
    • The Sunni Muslim majority under the Pashtun ruler resulted in further marginalization of the Shiite Hazara community, to the extent that in the 18th and 19th century.
    • They were forced to leave fertile lowlands in central Afghanistan and make the dry, arid mountainous landscape their new home.

    Their persecution

    • Persecution of the Shiite Hazaras is nothing new in Pakistan or neighbouring Afghanistan.
    • They have been frequently targeted by Taliban and IS militants and other militant groups in both countries.

    Causes of persecution: Ethnicity and Religion

    • Their unique identity, ethnicity and religion always made the Hazaras stand out among the other communities.
    • Hazaras speak Hazaragi, which is close to Dari Persian, the official language of modern-day Afghanistan.
    • The community also shares physical similarities with the Mongols and their speech, specific terms and phrases, reflect strong Central Asian Turkic influences.
    • This sets them apart from their neighbours in Pakistan and other communities within Afghanistan.

    An attempted ethnic cleansing

    • In the 19th century, the Hazara community constituted approximately 67 per cent of Afghanistan’s total population.
    • Since then, primarily due to violence, oppression and targeted massacres, that number has come down to a little as 10 to 20 per cent of the population now.
    • The attacks reached a crescendo in 2013 when three separate bombings killed more than 200 people in Hazara neighbourhoods of Quetta.
    • In the aftermath of this incident, the Shia community in Pakistan had erupted in anger over the Pakistani government’s lack of protection of its minorities.

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