💥UPSC 2027,2028 Mentorship (April Batch) + Access XFactor Notes & Microthemes PDF

Archives: News

  • Electoral Reforms In India

    In news: Electoral Bond Scheme

    The government has opened yet another week-long window for electoral bond sales starting December 5.

    What are Electoral Bonds?

    • Electoral bonds are banking instruments that can be purchased by any citizen or company to make donations to political parties, without the donor’s identity being disclosed.
    • It is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India.
    • The citizen or corporate can then donate the same to any eligible political party of his/her choice.
    • An individual or party will be allowed to purchase these bonds digitally or through cheque.

    About the scheme

    • A citizen of India or a body incorporated in India will be eligible to purchase the bond
    • Such bonds can be purchased for any value in multiples of ₹1,000, ₹10,000, ₹10 lakh, and ₹1 crore from any of the specified branches of the State Bank of India
    • The purchaser will be allowed to buy electoral bonds only on due fulfillment of all the extant KYC norms and by making payment from a bank account
    • The bonds will have a life of 15 days (15 days time has been prescribed for the bonds to ensure that they do not become a parallel currency).
    • Donors who contribute less than ₹20,000 to political parties through purchase of electoral bonds need not provide their identity details, such as Permanent Account Number (PAN).

    Objective of the scheme

    • Transparency in political funding: To ensure that the funds being collected by the political parties is accounted money or clean money.

    Who can redeem such bonds?

    • The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.
    • Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent of the votes polled in the last General Election to the Lok Sabha or the State Legislative Assembly, shall be eligible to receive the Electoral Bonds.

    Restrictions that are done away

    • Earlier, no foreign company could donate to any political party under the Companies Act
    • A firm could donate a maximum of 7.5 per cent of its average three year net profit as political donations according to Section 182 of the Companies Act.
    • As per the same section of the Act, companies had to disclose details of their political donations in their annual statement of accounts.
    • The government moved an amendment in the Finance Bill to ensure that this proviso would not be applicable to companies in case of electoral bonds.
    • Thus, Indian, foreign and even shell companies can now donate to political parties without having to inform anyone of the contribution.

    Issues with the Scheme

    • Opaque funding: While the identity of the donor is captured, it is not revealed to the party or public. So transparency is not enhanced for the voter.
    • No IT break: Also income tax breaks may not be available for donations through electoral bonds. This pushes the donor to choose between remaining anonymous and saving on taxes.
    • No anonymity for donors: The privacy of the donor is compromised as the bank will know their identity.
    • Differential benefits: These bonds will help any party that is in power because the government can know who donated what money and to whom.
    • Unlimited donations: The electoral bonds scheme and amendments in the Finance Act of 2017 allows for “unlimited donations from individuals and foreign companies to political parties without any record of the sources of funding”.

    Way ahead

    • The worries over the electoral bond scheme, however, go beyond its patent unconstitutionality.
    • The concern about the possibility of misuse of funds is very pertinent.
    • The EC has been demanding that a law be passed to make political parties liable to get their accounts audited by an auditor from a panel suggested by the CAG or EC. This should get prominence.
    • Another feasible option is to establish a National Election Fund to which all donations could be directed.
    • This would take care of the imaginary fear of political reprisal of the donors.

     

     

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • Digital India Initiatives

    Unified Payments Interface (UPI) market cap deadline extended by 2 years

    The National Payments Corporation of India (NPCI) has extended by two years the deadline to comply with its 30 percent cap on the market share of platforms operating on the Unified Payments Interface (UPI).

    What is UPI?

    • Unified Payments Interface (UPI) is an instant real-time payment system developed by National Payments Corporation of India (NPCI) facilitating inter-bank transactions.
    • The interface is regulated by the Reserve Bank of India (RBI) and works by instantly transferring funds between two bank accounts on a mobile platform.

    What is the NPCI plan for UPI?

    • NPCI had initially planned to enforce the market cap rules in January 2021.
    • It aimed to limit any single payments app from processing more than 30 per cent of UPI transactions in a month.

    Why extension?

    • The extension is being seen as a major relief for Walmart and Flipkart-backed PhonePe and Google Pay, which currently command a majority of the UPI market share.

    How could it impact UPI platforms?

    • Industry analysts believe the move comes as a shot in the arm for PhonePe and Google Pay, which collectively control more than 80 per cent of UPI’s market share.
    • For platforms like Paytm and WhatsApp Pay, however, the extension could be seen as a natural loss.
    • As of October, Paytm had a market share of 15 per cent on UPI.
    • In comparison, PhonePe had a 47 per cent market share, while GooglePay accounted for around 35 per cent.

    How is UPI performing?

    • According to the Reserve Bank of India’s Payment Vision 2025, UPI is expected to register an average annualized growth of 50 percent.
    • After touching a new high of Rs 12.11 lakh crore in October, the UPI transaction value for the month of November came in at Rs 11.90 lakh crore.
    • However, the transaction count at 7.3 billion in October remained the same in November.

     

    Try this PYQ:

    With reference to digital payments, consider the following statements:

    1. BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
    2. While a chip-pin debit card has four factors of authentication, BHIM app has only two factors of authentication.

    Which of the statements given above is/ are correct? (CSP 2018)

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

    Post your answers here.

     

     

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

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

    India tops index on Social Hostilities Index (SHI)

    shi

    In 2020, India has been ranked first in the Social Hostilities Index (SHI) released by US think-tank Pew Research Center.

    What is Social Hostilities Index (SHI)?

    • SHI measures acts of religious hostility by private individuals, organisations or groups in society.
    • The SHI measures acts of religious hostility by private individuals, organizations or groups.
    • The index comprises 13 metrics, including religion-related armed conflict or terrorism and mob or sectarian violence.
    • Questions used to compute the SHI included whether the country saw violence motivated by religious hatred or bias, whether individuals faced harassment or intimidation motivated by religious hatred or bias and whether there was mob violence against those of particular religious groups.

    How bad has India fared?

    • At 9.4 out of a maximum possible score of 10, India’s SHI in 2020 was worse than neighbouring Pakistan and Afghanistan, and a further increase in its own index value for 2019, the Pew data showed.
    • India has faced severe backlash due to its crackdown on a ‘religious’ congregation held in New Delhi defying the COVID pandemic.

    Other components: Government Restrictions Index (GRI)

    • India much better on a second index: the Government Restrictions Index (GRI).
    • This index looks at laws, policies and state actions restricting religious beliefs and practices.
    • China ranked the worst, with a score of 9.3.
    • India’s 34th rank was enough to categorize it among countries with “high” levels of such government restrictions.
    • The GRI comprises 20 measures, including efforts by governments to ban particular faiths, prohibit conversion, limit preaching or give preferential treatment to one or more religious groups

    Official data for substantiation

    • By India’s own official crime statistics, the picture is more mixed.
    • According to police data, religious riots for which cases were filed rose substantially in 2020, and declined again in 2021.
    • But there have been significant variations over time, and the numbers are too low as a share of overall rioting incidents to indicate a definitive trend.
    • Moreover, the home ministry no longer provides data on “communal incidents”, and the National Crime Records Bureau (NCRB) now only publishes data on religious “riots”.

     

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

    India leaps in to ICAO Aviation Safety Rankings

    icao

    In the rankings by the International Civil Aviation Organisation (ICAO), India is now at the 48th position, a “quantum leap” from the 102nd rank it had in 2018.

    ICAO Assessment

    • Under the ICAO standards, the Effective Implementation (EI) of six areas were assessed. They are LEG, ORG, PEL, OPS, AIR and AGA.
    1. LEG is Primary Aviation Legislation and Specific Operating Regulations;
    2. ORG is Civil Aviation Organisation;
    3. PEL is Personnel Licensing and Training;
    4. OPS is Aircraft Operations;
    5. AIR is Airworthiness of Aircraft; and
    6. AGA is Aerodrome and Ground Aid.

    How has India fared in ICAO ranking?

    • With a score of 85.49 per cent each, India and Georgia are at the 48th position.
    • Neighbouring Pakistan is at the 100th spot with a score of 70.39 per cent.

    Global scenario

    • The rankings are topped by Singapore with a score of 99.69 per cent.
    • It is followed by the UAE at the second position with a score of 98.8 per cent and the Republic of Korea is at the third place (98.24 per cent).
    • Others in the top ten are France (4th; 96.42 per cent), Iceland (5th; 95.73 per cent), Australia (6th; 95.04 per cent), Canada (7th; 94.95 per cent), Brazil (8th; 94.72 per cent), Ireland (9th; 94.6 per cent) and Chile (10th; 93.9 per cent).

    What is ICAO?

    • The ICAO is a specialized agency of the UN that coordinates the principles and techniques of international air navigation.
    • It fosters the planning and development of international air transport to ensure safe and orderly growth.
    • ICAO headquarters are located in the Quartier International of Montreal, Quebec, Canada.

    Functions of ICAO

    • Standardization: The ICAO Council adopts standards and recommended practices concerning air navigation, its infrastructure, flight inspection, prevention of unlawful interference, and facilitation of border-crossing procedures etc.
    • Investigation standards: ICAO defines the protocols for air accident investigation that are followed by transport safety authorities in countries signatory to the Chicago Convention on International Civil Aviation.

     

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    (Click) FREE 1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • Modern Indian History-Events and Personalities

    Shivaji Maharaj and the Agra escape

    Shivaji Maharaj

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    Context

    • Recently, Maharashtra Tourism Minister Mangal Lodha triggered a controversy by equating Chhatrapati Shivaji Maharaj’s legendary Agra escape to Chief Minister Eknath Shinde’s defection from the Uddhav Thackeray-led camp in Maharashtra. His comments drew sharp criticism from political parties and other organisations that venerate Shivaji as a Maratha icon, with no parallel in the past or present.

    Brief Political background of the issue

    • Eknath Shinde’s “revolt” against party leadership and CM Uddhav Thackeray in June this year led to the fall of the coalition government of the Shiv Sena, NCP, and the Congress. He has since taken the reins of Maharashtra as its CM.

    Shivaji Maharaj

    Who was Chhattrapati Shivaji Maharaj?

    • Chhatrapati Shivaji Maharaj (1630-1680): He was born on 19th February, 1630 at Shivneri Fort in District Pune in the present-day state of Maharashtra. He was born to a general Shahaji raje who served different Deccan Sultans over the course of his life and Jijabai, as known to be an influential and determined woman who was an embodiment of self-respect and virtue.
    • Founder of an Independent Maratha kingdom: Shivaji Maharaj was keen on expanding his father’s fiefdom of modern-day Pune into an independent Maratha state. He carved out an independent Maratha kingdom from various Deccan states in the 17th century. At the time of his death, he held around 300 forts over an area that stretched across the Konkan coast, from Surat to near Goa, and was overlooked by the strategic Western Ghats.
    • Contemporary kingdoms and power struggle: At this point of time, several Sultanates (mainly Bijapur, Golkonda and Ahmadnagar) and the Mughals were vying for the control of the Deccan. As Mughal power grew, these Sultanates would become tributaries to the Mughal Empire (while often continuing to bicker among themselves) with the rulers and ruling clans being given positions in the Mughal court.
    • Lifetime conflicts and fights for Swaraj: His conflict with the Adil Shahi Sultanate of Bijapur began when he was only 16. He would spend the rest of his life fighting various opponents, and in the process, laying the foundation for the Maratha Empire which would stretch across large parts of the Indian subcontinent and rule till the 19th Century.
    • Importance of forts in his times: Early in his life, he realised that the key to holding power in the Deccan (or for that matter, many places in India in that era) was to capture and hold important forts. Thus, his strategies would be centred around taking control of forts in strategic locations, often on hilltops. He also repaired and built new forts as his sphere of control increased.

    How is Shivaji Maharaj remembered?

    • An inspiration to fight against the colonial rule: Shivaji remained a Maratha folk legend until two centuries after his death. It was the British Raj and the subsequent anti-colonial movement that marked his increasing stature in history and as a pan Indian hero.
    • From a folk hero to a Pan India hero: Nationalist historians saw him as an example of an local Indian ruler who was able to successfully resist and defeat the powerful and oppressive “outsiders” (Muslim rulers, including both Mughals and the Deccan Sultans). Thus, Shivaji rose from being a folk hero to a nationalist icon, seen as a proto-nationalist himself.
    • Tales of his bravery and just rule used to infuse motivation: Tales of his bravery were told to galvanise a population that was enduring emasculation and injustices under its British overlords. Over the 19th and 20th centuries, the narrative around Shivaji Maharaj emphasised on both his military heroism and his just rule.

    Shivaji Maharaj

    Shivaji Maharaj and the Mughals

    • Meteoric rise: Shivaji Maharaj’s meteoric rise posed challenges to the suzerainty of the Mughals. His first direct encounter with the Mughals was during Aurangzeb’s Deccan campaigns of the 1650s. As Aurangzeb went North to fight for the Mughal throne, Shivaji Maharaj was able to seize further territory.
    • Swift and smart warfare tactics beyond understanding of the Mughals: His tactics against the Mughals were adapted to the specific nature of his force and the flabby Mughal armies. Using swift cavalry attacks, he would raid and pillage Mughal strongholds. While on the rare occasion he would engage in battle to actually capture and hold Mughal positions, most often, he would simply cause much menace, raid the treasury, and leave with the Mughals in terror and disarray.
    • Well know Seize of Surat: Famously, in 1664, he attacked the port of Surat (now in Gujarat) and plundered one of the richest and busiest commercial towns of Mughal India while the local governor hid in a nearby fort.
    • Posed a greatest challenge to Aurangzeb and subsequent treaty of Purandar: As the legend of Shivaji and the physical sphere of his influence grew, Aurangzeb sent a 100,000-strong, well-equipped army under Raja Jai Singh I to subdue him in 1665. After putting up a valiant fight, Shivaji was besieged in the Purandar hill fort.

    The chronology of the great escape

    • Taken to Agra after purandar treaty: He was taken to Aurangzeb’s court in Agra in 1666. He presented Aurangzeb with various gifts, but he felt slighted at the treatment he received in return, and made his displeasure clear in open court.
    • Kept under strict House arrest: Aurangzeb put him under house arrest in Agra. Far away from home and help, Shivaji realised he needed to escape to save himself and his territories. He began to plot a plan to return home and keep up his fight against the Mughals.
    • The perfect plan of escape: The story of Shivaji’s subsequent escape is now part of common lore. The popularly told story involves an elaborate plan, under which he began daily distribution of alms to brahmans. The alms would be sent from his home in Agra in large, covered baskets.
    • The final escape right under the nose of Mughals: After some time, the Mughal guards became lax about checking the contents of the baskets that daily left his house. One day, Shivaji slipped into one of the baskets, and put his young son, Sambhaji, in another basket. It was in these covered baskets that Shivaji and his son left Agra, right under the noses of the Mughals.
    • Smart and swift movement in disguise from the Mughal territory: From there, he would traverse across Mughal territory, living incognito until he reached the safer lands closer to home. Some versions of this story say that he took the disguise of a wandering ascetic while others say he had a number of different disguises. His exact path is not known, though folktales and songs memorialising Shivaji often mention different towns and places he crossed.
    • Embarrassed Aurangzeb regarded him as a king: Aurangzeb was livid and embarrassed. But he chose not to start an immediate conflict with Shivaji again. Instead, he offered Shivaji the title of Raja and guaranteed his authority in the Maratha lands as long as he acknowledged the supremacy of the Mughals and maintained truce.

    Shivaji Maharaj

    Coronation of Shivaji Maharaj to Chhatrapati and the ideal rule

    • By 1669, Shivaji had regrouped and raised an effective army. Using his old guerilla tactics, he would swiftly descend into static Mughal and Bijapuri strongholds, looting and pillaging the shocked Mughals.
    • During this time, Aurangzeb was occupied with Pathan revolts in the North-West corner of his Empire. Shivaji deftly regained his lost positions in the Konkan coast. In 1674, he crowned himself Chhatrapati, officially creating an independent Maratha kingdom.
    • The next six years were spent expanding his rule and forging new political norms, replacing the prevailing Indo-Persian court culture. He promoted the use of Marathi and Sanskrit in his courts and created an elaborate administrative system with a council of ministers known as “Ashta Pradhan.”

    Conclusion

    • Chhatrapati Shivaji Maharaj is not just a name or a person but to many he is an idea, a life and inspiration for today and tomorrow, which has no parallel in the past or the present.
    • Protection of the Swarajya and welfare of his subjects were the motives that pushed Shivaji Maharaj to escape from Agra. Comparing his love for his subjects with the political exigencies and manoeuvers of present-day politicians will be an injustice to the astuteness of Chhatrapati Shivaji Maharaj.

    Mains question

    Q. Chhatrapati Shivaji Maharaj is considered as the king of the people; Discuss how he is remembered today and what qualities make him stand tall and different from those of the past and present?

    (Click) FREE1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • Indian Ocean Power Competition

    North East as Gateway to Indo-Pacific Strategy

    Indo-Pacific

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    Context

    • India’s ‘Look East’ and ‘Act East’ policies have moved into the phase of Indo-Pacific policy and strategy. But what we in the national capital interpret as the ‘Indo-Pacific’ is different from the perceptions of this policy in North-eastern and eastern India.

    What is Indo-pacific?

    • The Indo-Pacific is geographic region interpreted differently by different countries.
    • For India, the geography of the Indo-Pacific stretches from the eastern coast of Africa to Oceania whereas, for US, it extends up to the west coast of India which is also the geographic boundary of the US Indo-Pacific command.

    Indo-Pacific

    Importance of North-East

    • Security of India: The Northeast which comprises seven ‘sisters’ or States and one ‘brother’, Sikkim, has been witnessing transformation as it heads towards better security conditions and development
    • Geography and Biodiversity: North-eastern Indian States are blessed with a wide range of physiographic and ecoclimatic conditions and the geographical ‘gateway’ for much of India’s endemic flora and fauna.
    • Siliguri corridor only connecting link: North-East is home to 3.8% of the national population and occupies about 8% of India’s total geographical area. Siliguri corridor, a narrow strip of land in West Bengal, popularly known as “chicken’s neck” connects this region to the rest of mainland India.

    Present condition of north east

    • Improved security: Security conditions have improved significantly since 2017. However, the core issues behind the insurgency have remained unresolved.
    • Serious non-traditional threats: A notable contrast in security assessments of the authorities and others came to the fore. The official perspective was that the pernicious phenomena of smuggling, drug trafficking, transnational border crime, insurgent activity, and the influx of refugees (from Myanmar) represented serious non-traditional threats.
    • Chinese hand in nefarious activities: China was viewed as a ‘constant player’ behind these nefarious activities. This has necessitated vigilance and strict action by the Assam Rifles and other security agencies.
    • Sensitive border management: The insensitive handling of those engaged in lawful exchanges with the neighbouring countries. A balanced view indicates that considerable scope exists for more effective and people-sensitive border management in the future.

    Development as priority in North East

    • Rising road infrastructure: The Northeast is on the right path to concentrate on economic development. More is awaited through improvement in roads linking north-eastern towns and job creation for thousands of graduates produced by local universities.
    • Hub of medical tourism: Manipur needs to be promoted as the hub of medical tourism for other Indian States and neighbours such as Myanmar.
    • Investment needs to increase: The State’s research and development facilities to leverage the region’s biodiversity should be expanded. Accelerated development requires increased investment by Indian corporates and foreign investors as well as better management.
    • Blueprint for economic development: Strategic and business community to contribute to crafting a concrete blueprint for leveraging opportunities relating to commerce, connectivity, and human capital development.

    Cultural diplomacy from North east

    • Showcasing the culture of north east: An ambitious endeavour by 75 artists from nine countries highlighted the region’s ‘unity in diversity’ through music, dance, drama, and cuisine.
    • Education, tourism and trade: Clearly, expanding the reach of cultural diplomacy and people-to-people cooperation through greater educational exchanges, tourism, and trade is desirable.
    • Regional cooperation through cultural exchange: Harsh Vardhan Shringla, former Foreign Secretary, aptly stressed that the “shared culture, history and mutual social threads that tie the region with India also an important component towards fostering regional cooperation”.

    Indo-Pacific

    Cultural dimension to Indo-Pacific

    • Geo-cultural dimension: At Kolkata, intellectuals and performers in the cultural domain from India, the U.S., Japan, Thailand, Sri Lanka, and Bangladesh reflected on the Indo-Pacific construct’s cultural dimensions. Moving beyond geopolitics and geo-economics, neighbors should focus on “the geo-cultural dimension” of the Indo-Pacific.
    • Expanding people to people cooperation: Diplomats from the region agree on the importance of expanded people-related cooperation which would lead to wider acceptance of the Indo-Pacific and consolidation of the Quad.

    Conclusion

    • While implementing India’s Indo-Pacific strategy, voices from Northeast and eastern India must be heard. Thus, beyond ‘Look East’ and ‘Act East’ lies ‘Think and Relate East’, especially within our own country.
  • Cashless Society – Digital Payments, Demonetization, etc.

    India’s Central bank digital currency (CBDC) in detail

    digital

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    Context

    • The Reserve Bank of India (RBI) has launched the first pilot of the retail digital rupee, also known as e₹-R, on December 1, 2022. The digital token that represents legal tender will be issued in the same denominations as paper currency and coins. The RBI’s pilot on the digital rupee will test the robustness of the new system. Let’s understand it in detail.

    digital

    The first pilot project of retail digital rupee

    • Allowed banks: Initially, only four banks- State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in four cities have been allowed to offer e₹-R. The scope of the pilot will be increased gradually to include more banks, users and locations.
    • Transaction: People will get e₹-R from banks and will be able to make transactions via their digital wallets. The digital rupee can be stored on mobile phones or devices.

    What is a Central bank digital currency (CBDC)?

    • Like fiat currency in digital form: CBDC is a legal tender issued by the central bank in digital form. Like rupee notes or coins, which are in physical form. Like fiat currency, it can also be exchanged between people. Simply, put it’s just like rupee (₹) notes but in digital form (e₹). You can also exchange e₹ for physical currency notes.
    • Unlike fiat currency no need to have account: However, unlike fiat currency that’s usually stored in banks and hence their liability, CBDC is a liability on the RBI’s balance sheet. That’s why you don’t necessarily need to have a bank account to own a digital rupee.

    Why do we need CBDC?

    • Cost efficient management: CBDC will cut the cost related to physical cash management. India spent ₹4,984.80 crore on printing money in FY22 and ₹4,012.10 crore a year before that. These expenses are borne by people, businesses, banks and the RBI. e₹ cuts all kinds of printing, storage, transportation and replacement and settlement costs. Though the RBI will invest a significant amount in building CBDC infrastructure, subsequent marginal operating costs will be very low.
    • Boost to digital economy and financial inclusion: It’ll fulfil the higher cash requirement of the country. The government will be able to make money available in areas where it’s a challenge to provide physical cash. Also, it’ll boost India’s digital economy, enhance financial inclusion, and make the financial system efficient.
    • People will have money in uncertain times: Since e₹ is the central bank money, in any uncertain situation like COVID-19, it’ll save people’s savings. Banks only insure deposits up to Rs 5 lakh. In case of defaults, people could lose their savings.
    • Multiple saving and transaction options: e₹ will provide you with other options like e-wallets, mobile banking, and UPI to make payments.
    • Much safer payment option: e₹ is a safe central bank instrument, with direct access to the RBI money for payment and settlement. It is an electronic version of cash, whose main use case is retail

    digital

    Will CBDC replace UPI?

    • Not expected to substitute but supplement payment option: The CBDC-based payment system is not expected to substitute other modes of existing payment options. It will supplement by providing another payment avenue to people.
    • India already has a sound payment system: UPI uses your money deposited with banks but with CBDC, the money becomes the liability of RBI India already has a sound payment system, with payment products like RTGS, NEFT and UPI, etc., coupled with an exponential increase in digital transactions.

    No interest on e₹? but why?

    • No interest on digital money: According to the RBI, if it starts paying interest on digital money, it could lead to a massive disintermediation in the financial system, in which banks will lose deposits, and thus hurt their credit creation capacity in the economy.
    • Rationale behind No interest on digital rupee: Banks may be compelled to increase deposit rates, which will increase their costs of funding and decrease net interest income. Ultimately, the cost will be passed on to borrowers.
    • CBDC will be attractive payment option without interest: If there is no interest, CBDC can still be attractive as a medium of payment, even while its attractiveness as a savings instrument diminishes. Also, banks would restrain themselves from distributing CBDCs if they find it as a threat to bank deposits, which can hamper credit flows and the adoption of CBDCs.

    digital

    How will CBDC be different from crypto?

    • CBDC is Algorithm based unlike crypto mining: The central bank will be issuing CBDCs based on algorithm-driven processes, rather than mining through competitive reward methods. These algorithms will have energy efficiency and environmental friendliness as their core principles, unlike private crypto mining.
    • Less energy consumption unlike crypto: Therefore, issuance and management of CBDCs are expected to have much lesser energy consumption vis-à-vis more energy-intensive processes normally associated with the mining and distribution of private cryptocurrencies.
    • Legal consumer protection: Unlike private cryptos wherein any individual can compete to mine and create the cryptocurrency, only the central bank can issue the CBDC and can simply opt for conversion of the bank’s existing balances to CBDC balances. So, CBDCs will provide the public with the benefits of virtual currencies, while ensuring consumer protection by avoiding the damaging social and economic consequences of private virtual currencies.

    Why India needs a digital rupee?

    • Online transactions: India is a leader in digital payments, but cash remains dominant for small-value transactions.
    • High currency in circulation: India has a fairly high currency-to-GDP ratio.
    • Cost of currency management: An official digital currency would reduce the cost of currency management while enabling real-time payments without any inter-bank settlement.

    Conclusion

    • e₹-R is a digital token that has real value like rupee notes or coins. CBDC will make transactions and currency exchange smoother, and it’ll boost financial inclusion. The RBI’s pilot on the digital rupee will test the robustness of the new system.

    Mains question

    Q. What is central bank digital currency? Why do we need CBDC? It is said that digital rupee is different from crypto currency. Discuss.

    (Click) FREE1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • Judicial Appointments Conundrum Post-NJAC Verdict

    We are the most transparent institution: Supreme Court

    The Supreme Court has said that it had become a “fashion” for its former judges to comment on earlier decisions of the Collegium when they were part of it while adding that the apex court was the “most transparent institution”.

    What is Collegium System?

    • The Collegium of judges is the Indian Supreme Court’s invention.
    • It does not figure in the Constitution, which says judges of the Supreme Court and High Courts are appointed by the President and speaks of a process of consultation.
    • In effect, it is a system under which judges are appointed by an institution comprising judges.
    • After some judges were superseded in the appointment of the CJI in the 1970s, and attempts made subsequently to effect a mass transfer of High Court judges across the country.
    • Hence there was a perception that the independence of the judiciary was under threat. This resulted in a series of cases over the years.

    Evolution: The Judges Cases

    • First Judges Case (1981) ruled that the “consultation” with the CJI in the matter of appointments must be full and effective.
    • However, it rejected the idea that the CJI’s opinion, albeit carrying great weight, should have primacy.
    • Second Judges Case (1993) introduced the Collegium system, holding that “consultation” really meant “concurrence”.
    • It added that it was not the CJI’s individual opinion, but an institutional opinion formed in consultation with the two senior-most judges in the Supreme Court.
    • Third Judges Case (1998): On a Presidential Reference for its opinion, the Supreme Court, in the Third Judges Case (1998) expanded the Collegium to a five-member body, comprising the CJI and four of his senior-most colleagues.

    The procedure followed by the Collegium

    Appointment of CJI

    • The President of India appoints the CJI and the other SC judges.
    • As far as the CJI is concerned, the outgoing CJI recommends his successor.
    • In practice, it has been strictly by seniority ever since the supersession controversy of the 1970s.
    • The Union Law Minister forwards the recommendation to the PM who, in turn, advises the President.

    Other SC Judges

    • For other judges of the top court, the proposal is initiated by the CJI.
    • The CJI consults the rest of the Collegium members, as well as the senior-most judge of the court hailing from the High Court to which the recommended person belongs.
    • The consultees must record their opinions in writing and it should form part of the file.
    • The Collegium sends the recommendation to the Law Minister, who forwards it to the Prime Minister to advise the President.

    For High Courts

    • The CJs of High Courts are appointed as per the policy of having Chief Justices from outside the respective States. The Collegium takes the call on the elevation.
    • High Court judges are recommended by a Collegium comprising the CJI and two senior-most judges.
    • The proposal, however, is initiated by the Chief Justice of the High Court concerned in consultation with two senior-most colleagues.
    • The recommendation is sent to the Chief Minister, who advises the Governor to send the proposal to the Union Law Minister.

    Does the Collegium recommend transfers too?

    • Yes, the Collegium also recommends the transfer of Chief Justices and other judges.
    • Article 222 of the Constitution provides for the transfer of a judge from one High Court to another.
    • When a CJ is transferred, a replacement must also be simultaneously found for the High Court concerned. There can be an acting CJ in a High Court for not more than a month.
    • In matters of transfers, the opinion of the CJI “is determinative”, and the consent of the judge concerned is not required.
    • However, the CJI should take into account the views of the CJ of the High Court concerned and the views of one or more SC judges who are in a position to do so.
    • All transfers must be made in the public interest, that is, “for the betterment of the administration of justice”.

    Loopholes in the Collegium system

    • Lack of Transparency: Opaqueness and a lack of transparency, and the scope for nepotism are cited often.
    • Judges appointing Judge: The attempt made to replace it with a ‘National Judicial Appointments Commission’ was struck down by the court in 2015 on the ground that it posed a threat to the independence of the judiciary.
    • Criteria: Some do not believe in full disclosure of reasons for transfers, as it may make lawyers in the destination court chary of the transferred judge.

    Way ahead

    • In respect of appointments, there has been an acknowledgment that the “zone of consideration” must be expanded to avoid criticism that many appointees hail from families of retired judges.
    • The status of a proposed new memorandum of procedure, to infuse greater accountability, is also unclear.
    • Even the majority opinions admitted the need for transparency, now Collegiums’ resolutions are now posted online, but reasons are not given.

     

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    (Click) FREE1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • Remittances to India set to cross record $100-billion mark in 2022

    India is expected to receive a record $100 billion in remittance in 2022, the top recipient this year, the World Bank has said.

    What are Remittances?

    • A remittance is a non-commercial transfer of money by a foreign worker, a member of a diaspora community, or a citizen with familial ties abroad, for household income in their home country or homeland.
    • The World Bank defines it as “the sum of worker’s remittances, compensation of employees, and migrants’ transfers as recorded in the IMF Balance of Payments.
    • Workers remittances are current transfers by migrant who are considered residents in the source.
    • Remittances are a vital source of household income for low- and middle-income countries.

    India’s total remittances to grow

    • Remittances to India are money transfers from non-resident Indians (NRIs) employed outside the country to family, friends or relatives residing in India.
    • In its Migration and Development Brief, the World Bank has said India’s remittance will grow 12 per cent from 7.5 per cent last year, resulting in $100 billion flow as compared to $89.4 billion in 2021.
    • It attributed the feat to the large share of Indian migrants earning relatively high salaries in the US, UK and East Asia.

    Key points from the report by World Bank

    • Highly-skilled Indian migrants living in wealthy nations such as the US, UK, and Singapore were sending more money home.
    • Remittances to low and middle-income countries have grown by 5% in 2022 to around $626 billion – around half the rate of growth seen in 2021.
    • The amount of money sent back home by migrants around the world has grown by 5% in 2022.
    • Other top recipient countries for remittances include Mexico, China, Egypt and the Philippines.
    • Domestic and International shocks have affected countries like Pakistan, Bangladesh, and Sri Lanka for whom remittances earned by migrants are expected to drop this year
    • Barring India and Nepal, other south Asian countries saw a decline of more than 10% in their remittances from 2021, due to the end of government incentives introduced during the pandemic

    Why is remittance to India so high this year?

    • Upskilling: There has been a gradual shift in destinations for Indian migrants aided by a structural shift in qualifications.
    • Work from home: Indian migrants in high-income countries benefited from work-from-home and large fiscal stimulus packages.
    • Easing of pandemic: As the pandemic eased, the wage hikes and “record-high employment conditions” helped migrants send money home despite high global inflation.
    • Inflation control in India: The price support policies kept inflation at bay in India.
    • Crude oil dynamics: Demand for labour increased with higher oil prices, which in turn increased remittances for Indian labourers.

    Significance of remittances

    • Stable source of funds: Remittance flows tend to remain relatively stable through the business cycle, thereby having the potential to support households in the face of economic adversity.
    • Economic lifeline: In countries affected by political conflict, they are often an economic lifeline to the poor.
    • Labour contribution: While migrant remittances contribute to the development of their home country, and also to the host country by filling the gap between labour demand and supply and making a positive net fiscal contribution.
    • Globalization: In this way, remittances represent globalization with a human face, contributing to the spread of global interdependence at all levels – social, economic and political.

    Issues with Remittances

    • Fear of currency depreciation: It causes the rupee to weaken against the dollar, which in return impacts the businesses exposed to foreign exchange, and the economy overall.
    • Accuracy of data: A key challenge for policymakers, researchers and investors interested in remittance flows concerns the accuracy and consistency of available data.
    • Accounting inconsistencies: The varied nature of remittance transactions makes the compilation process complex, resulting in a systemic problem of under-reporting of flows and data asymmetries between host and recipient countries.
    • No formal registration in India: The main source of data on remittances is the World Bank, which combines national balance of payments data compiled by the IMF with country information.
    • Ignoring informal flows: A large share of remittances is believed to flow through informal channels, which are often more convenient and cheaper than formal ones.
    • Hawala transactions: In addition, Hawala (an international network of money brokers) and Hundi (a form of credit instrument) systems operate in parallel to formal remittance channels.

    Way forward

    • Promoting labour mobility: India should aim to increase remittances to say 10% of GDP. The Philippines’ model of promoting labour mobility should be replicated in India.
    • Reducing the costs involved: Both the cost of recruitment of such workers and the cost of sending remittances back to India should come down.

     

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    (Click) FREE1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

  • Festivals, Dances, Theatre, Literature, Art in News

    ‘French Baguette’ gets UNESCO heritage status

    Baguette

    Baguette the staple French bread has been inscribed into the UN’s list of intangible cultural heritage (ICH).

    What is a Baguette?

    • The baguette is a long and thin loaf made of flour, water, salt and yeast, and is consumed as a staple in France.
    • Some believe that it was invented by August Zang, a baker and an entrepreneur from Vienna in 1839, who introduced the world to the taste of crusty bread with softer insides, using a steam oven.
    • It gained its official name in 1920.
    • The history of the bread is uncertain, some also believe that Napoleon Bonaparte ordered thin sticks of bread for consumption by his soldiers as they could be carried from one place to another more conveniently.

    Why did France nominate it for the UN list?

    • About 10 billion baguettes are consumed every year in France by a population of 67 million.
    • It drew attention to the steady decline in the number of bakeries in the country as around 20,000 of them have closed down since 1970.
    • In March 2021, France nominated the baguette as its candidate for consideration within the UNESCO ICH list.
    • In 1970, there were 55,000 artisanal bakeries (one for every 790 residents) compared with 35,000 today (one for every 2,000), often in favour of baguettes produced industrially.

    Back2Basics: UNESCO Intangible Cultural Heritage (ICH)

    • ICH means the practices, representations, expressions, knowledge, skills – as well as the instruments, objects, artefacts and cultural spaces associated with them that communities, groups and, in some cases, individuals recognize as a part of their cultural heritage.
    • Furthermore, its importance is not in the cultural manifestation itself, but in the wealth of knowledge, know-how and skills that are transmitted from one generation to the next.
    • The adoption of the Convention for the Safeguarding of the ICH by the General Conference of UNESCO in 2003 was a crucial step towards preserving intangible heritage.
    • UNESCO’s list of Intangible Cultural Heritage of Humanity was established in the year 2008.

    Criteria for the selection

    • There are three criteria for an intangible cultural heritage to be inscribed in the United Nations list.
    • The entity must-
    1. be recognized by communities, groups and, in some cases, individuals as part of their cultural heritage,
    2. be transmitted from generation to generation and be constantly recreated by communities and groups in response to their environment, their interaction with nature and their history and
    3. provide them with a sense of identity and continuity, thus promoting respect for cultural diversity and human creativity

    India’s ICH on the UNESCO list

    • Sangeet Natak Akademi is the nodal organisation which looks after this function, and files nominations of intangible cultural entities from India, for evaluation by the international body.
    • ICG from India include Kolkata’s Durga Puja (2021), Kumbh Mela (2017), Navroz (2016), Yoga (2016), traditional brass and copper craft of utensil-making among coppersmiths of Punjab (2014), Sankirtana, a ritual musical performance of Manipur (2013), and the Buddhist chanting of Ladakh (2012).
    • Before 2011, the list included Chhau dance, Kalbelia folk songs and dance of Rajasthan, and Mudiyettu, a dance drama from Kerala (2010), Ramman, a religious festival and theatre performance of Garhwal in the Himalayas (2009), and Kutiyattam or Sanskrit theatre, and Vedic chanting (2008).
    • Ramlila, a traditional performance of Ramayana, was also included in 2008.
    • This year, India nominated Garba, a traditional dance form that originated in the state of Gujarat, for inscription on UNESCO’s ICH list.

     

    Click and get your FREE Copy of CURRENT AFFAIRS Micro Notes

    (Click) FREE1-to-1 on-call Mentorship by IAS-IPS officers | Discuss doubts, strategy, sources, and more

Join the Community

Join us across Social Media platforms.