Many states have outlawed firecrackers and mandated the production, sale, and usage of only green firecrackers in light of Diwali’s impending arrival and the air pollution crisis.
What are green crackers?
Green Crackers are fireworks that are healthy to the environment and can lessen the air pollution that conventional firecrackers produce.
The Council for Scientific and Industrial Research (CSIR) created these.
These green crackers, designed by the National Environmental and Engineering Research Institute (NEERI), a CSIR lab, contain flower pots, pencils, fireworks, maroons, bombs, and chakkar.
How are they made?
Green crackers, also known as eco-friendly crackers, are made from alternative raw materials to have a smaller negative impact on the environment and to pose fewer health hazards.
It has been stated that green crackers are environmentally friendly because they don’t contain aluminum, barium, potassium nitrate, or carbon.
Are they totally pollution free?
Green crackers are 30% less polluting than regular ones.
Green crackers have less or no barium, and that the chemical barium nitrate is what causes the smoke and emissions.
In addition to lowering air pollution, green crackers are said to have a lower sound level than the ordinary crackers—between 110 and 125 decibels as opposed to roughly 160 decibels for conventional crackers.
Despite all of their benefits, these environmentally friendly firecrackers are more expensive than standard ones.
Types of green crackers
(1) SWAS – Safe Water Releaser
They will discharge water vapour into the atmosphere, which will dampen the discharged dust.
It won’t contain sulphur or potassium nitrate.
There will be a release of a diluent for gaseous emissions.
There will be a 30% reduction in the amount of particle dust emitted.
(2) STAR – Safe Thermite Cracker
Does not contain sulphur and potassium nitrate
Discharge of less particulate matter
Lowered noise level
(3) SAFAL – Safe Minimal Aluminum
Does not contain sulphur and potassium nitrate
Discharge of less particulate matter
Lowered noise level as compared to traditional ones
Judicial observation over fire-crackers
It is made clear that there is no total ban on the use of firecrackers.
Only those firecrackers are banned (joined, chemical) which are found to be injurious to health and affect the health of the citizens particularly the senior citizens and the children.
What are the traders’ concerns?
Traders have expressed concerns about the crackers’ shelf life due to the new green cracker composition.
Manufacturers also need to overcome the rigorous certification process run by the Petroleum and Explosives Safety Organisation (PESO).
While Oral Rehydration Solution (ORS) as a simple, effective remedy for dehydration is known around the world, the physician who pioneered the treatment, Dr. Dilip Mahalanabis, passed away.
What is ORS?
Oral rehydration therapy is a type of fluid replacement used to prevent and treat dehydration, especially due to diarrhea.
It involves drinking water with modest amounts of sugar and salts, specifically sodium and potassium.
Oral rehydration therapy can also be given by a nasogastric tube.
About Dr. Mahalanabis
Born on November 12, 1934 in West Bengal, Dr Mahalanabis studied in Kolkata and London.
He joined the Johns Hopkins University International Centre for Medical Research and Training in Kolkata in the 1960s, where he carried out research in oral rehydration therapy.
When the 1971 war broke out, millions of people from then East Pakistan took refuge in India.
Clean drinking water and sanitation were problems at these refugee camps, and cholera and diarrhoea broke out among people anyway exhausted and dehydrated.
Dr Mahalanabis and his team were working in one such camp at Bongaon.
Stocks of intravenous fluids were running out, on top of which there weren’t enough trained personnel to administer the IV treatment.
How he discovered ORS?
From his research, Dr Mahalanabis knew that a solution of sugar and salt, which would increase water absorption by the body, could save lives from Cholera.
He and his team then prepared solutions of salt and glucose in water and began storing them in large drums, from where patients or their relatives could help themselves.
The oral solution then consisted of 22 gm glucose (as commercial monohydrate), 3.5 gm sodium chloride (as table salt) and 2.5 gm sodium bicarbonate (as baking soda) per liter of water.
This was the simplest formula, containing the minimum number of ingredients, previously found to be effective in severely ill patients with cholera.
His legacy
While initially, the medical fraternity was septical, the WHO eventually adopted ORS as the standard method for treating cholera and other diarrhoeal diseases.
Today, the WHO recommends a combination of sodium chloride, anhydrous glucose, potassium chloride and Trisodium citrate dihydrate as the ORS formula.
GS-1 Salient features of Indian Society, Diversity of India.
GS-2 Effect of policies and politics of developed and developing countries on India’s interests
GS-3 Science and Technology- developments and their applications and effects in everyday life
GS-4 Attitude: content, structure, function; its influence and relation with thought and behaviour; moral and political attitudes; social influence and persuasion.
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For the second time in two years, the Ministry of Women and Child Development rejected the Global Hunger Index (GHI) that ranked India 107 among 121 countries. India was accorded a score of 29.1 out of 100 (with 0 representing no hunger), placing it behind Sri Lanka (66), Myanmar (71), Nepal (81) and Bangladesh (84). It referred to the index as “an erroneous measure of hunger”.
Annual report: The GHI is a peer reviewed annual report that endeavours to “comprehensively measure and track hunger at the global, regional, and country levels”. Authors of the report primarily refer to the United Nations’ Sustainable Development Goal 2(SDG 2) that endeavours to achieve ‘Zero Hunger’ by 2030.
Four Indicators: According to them, the report attempts to “raise awareness and understanding of the struggle against hunger”. The GHI score is computed using four broad indicators under nourishment (measure of the proportion of the population facing chronic deficiency of dietary energy intake), child stunting (low height for age), child wasting (low weight for height) and child mortality (death of a child under the age of five).
Why these four Indicators are considered?
To acknowledge undernourishment: As per the authors, it provides a basis to measure inadequate access to food and is among the lead indicators for international hunger targets, including the UN SDG 2. Child stunting and mortality, offers perspective about the child’s vulnerability to nutritional deficiencies, access to food and quality of nutrition.
To address urgent requirement of nutrition: Since children (especially below five) are at a developmental age there is a greater and urgent requirement for nutrition with results particularly visible. This forms the basis of assessing nutritional requirement among children. Adults are at a sustainable age they are not growing but rather subsisting on nutrition for healthy survival. And lastly, on the same rationale, child mortality indicates the serious consequences of hunger.
Uses data provided by Government: It explains that while FAO uses a suite of indicators on food security, including two important indicators — prevalence of undernourishment and prevalence of moderate or severe food insecurity. The GHI only uses the data obtained through food balance sheets based on data reported by member countries, including India.
Shows a picture of food supply chain: A food balance sheet provides a comprehensive picture of the pattern of a country’s food supply during a specified reference period. It lists down the source of the supply and its utilisation specific to each food category.
Takes into account three child specific indicators: On why the GHI uses three child specific indicators out of the four to calculate hunger for a country’s population, the website explains, By combining the proportion of undernourished in the population(1/3 of the GHI score) with the indicators relating to children under age five (2/3of the GHI score), the GHI ensures that both the food supply situation of the population as a whole and the effects of inadequate nutrition within a vulnerable subset of the population are captured.
International recognition: A Senior Policy Officer at the GHI said that, “All four indicators used in the calculation of the global hunger are recognised by the international community, including India, and used for measuring progress towards the UN SDGs.”
What are the Objections of Government of India?
Very small sample size of the Index: As per the Ministry for Women and Child Development, the report lowers India’s rank based on the estimates of the Proportion of Undernourished (PoU) population. It elaborates that the U.S. Food and Agriculture Organisation (FAO) estimate is based on the ‘Food Insecurity Experience Scale (FIES)’ survey module conducted using the Gallup World Poll that bears a sample size of 3,000 respondents being asked eight questions. It stated that the data represented a miniscule proportion for account of India’s size.
Counter assertion by India’s dietary supply is increasing: It countered the assertions in the report pointing to India’s per capita dietary energy supply increasing year on year due to enhanced production of major agricultural commodities in the country over the years.
Index doesn’t reflect the actual ground reality: According to the Ministry, the report is not only disconnected from ground reality but also chooses to ignore the food security efforts of the Central government especially during the pandemic.
Efficient PMGKAY: The Union Cabinet through the Pradhan Mantri Garib KalyanAnn Yojana (PMGKAY) provisioned an additional 5 kg ration per person each month in addition to their normal quota of food grains.
What are the Government efforts to address the hunger issue so far?
The Midday Meal Scheme: The Midday meal is a school meal programme in India designed to better the nutritional standing of school-age children nationwide.
The programme supplies free lunches on working days for children in primary and upper primary classes in government, government aided, local body, Education Guarantee Scheme, and alternate innovative education centres, Madrasa supported under Sarva Shiksha Abhiyan, and National Child Labour Project schools run by the ministry of labour.
Serving 120 million children in over 1.27 million schools and Education Guarantee Scheme centres, the Midday Meal Scheme is the largest of its kind in the world.
PM-POSHAN: The name of the scheme has been changed to PM-POSHAN (Pradhan Mantri Poshan Shakti Nirman) Scheme, in September 2021, by MoE (Ministry of Education), which is nodal ministry for the scheme.
The Central Government also announced that an additional 24 lakh students receiving pre-primary education at government & government-aided schools would also be included under the scheme by 2022.
Conclusion
No country becomes great by dwarfing its people. India has certainly improved its poverty and hunger problems but there is still lot of ground yet to cover. Global hunger index may have exaggerated the India’s hunger issue but hunger problem in India is real if not substantial.
Mains Question
Q.Explain the methodology used by global hunger index report and India’s objection to it. What are the initiatives of government to reduce the hunger problem in India?
The Hunger Hotspots Outlook (2022-23) a report by the Food and Agriculture Organization of the United Nations (FAO) and the World Food Programme (WFP) forebodes escalating hunger, as over 205 million people across 45 countries will need emergency food assistance to survive. 16 October is celebrated as World Food Day.
What is the current situation of Food security worldwide?
Adverse impact of COVID 19 pandemic: Globally, food and nutrition security continue to be undermined by the impacts of the COVID 19 pandemic, climate change, spiralling food inflation, conflict, and inequality.
Challenge of Severe hunger continues: Today, around 828 million people worldwide do not have enough to eat, and over 50 million people are facing severe hunger.
What are the challenges for ensuring food security?
The challenge of Climate change: Recent climate shocks have raised concerns about India’s wheat and rice production over the next year. Therefore, it is important to place a greater focus on climate adaptation and resilience building.
Rising population will need more resource: By 2030, India’s population is expected to rise to 1.5 billion. Agro food systems will need to provide for and sustainably support an increasing population.
The challenge of Soil degradation: Nutrition and agricultural production are not only impacted by climate change but also linked to environmental sustainability. Soil degradation by the excessive use of chemicals, non-judicious water use, and declining nutritional value of food products need urgent attention.
Constant efforts towards Self-sufficiency: India has had an inspiring journey towards better production and achieving self-sufficiency and is now one of the largest agricultural product exporters. During 2021-22,it recorded $49.6billion in total agriculture exports a 20%increase from 2020-21.
Efficient targeted public distribution system: One of India’s greatest contributions to equity in food is its National Food Security Act (NFSA)2013 which anchors the Targeted Public Distribution System (TPDS), the PM POSHAN scheme (earlier known as the Midday Meals scheme), and the Integrated Child Development Services (ICDS).
Extensive food safety net: Today, India’s food safety nets collectively reach over a billion people. The WFP works with State and national governments to strengthen these systems to reach the people who need them most.
Large scale digitization of programmes: The Government continues to take various measures to improve these programmes with digitisation and measures such as rice fortification, better health, and sanitation.
Better buffer stock policy: Food safety nets and inclusion are linked with public procurement and buffer stock policy visible during the global food crisis (2008-12)and the COVID19 pandemic fallout, whereby vulnerable and marginalised families in India continued to be buffered by the TPDS which became a lifeline.
Successful implementation of PMGKAY: An International Monetary Fund paper titled ‘Pandemic, Poverty, and Inequality: Evidence from India’ asserted that‘ extreme poverty was maintained below 1% in 2020 due to the Pradhan Mantri Garib KalyanAnna Yojana (PMGKAY
How India and World can manage food security?
Avoiding conventional input intensive agriculture: There is increased recognition to move away from conventional input intensive agriculture towards more inclusive, effective and sustainable agro food systems that would facilitate better production.
Promoting sustainable practices: Since 1948, the FAO has continued to play a catalytic role in India’s progress in the areas of crops, livestock, fisheries, food security, and management of natural resources through the promotion of sustainable practices.
Focus on millets: Millets have received renewed attention as crops that are good for nutrition, health, and the planet. As climate-smart crops, they are hardier than other cereals. Since they need fewer inputs, they are less extractive for the soil and can revive soil health.
India’s Efforts as an example: India has led the global conversation on reviving millet production for better lives, nutrition, and the environment, including at the UN General Assembly, where it appealed to declare 2023 as the International Year of Millets. It is the world’s leading producer of millets, producing around 41% of total production in2020. The national government is also implementing a Sub-Mission on Nutrition-Cereals (Millets) as part of the National Food Security Mission.
G20 presidency an opportunity for India: India’s upcoming G20 presidency is an opportunity to bring food and nutrition security to the very centre of a resilient and equitable future.
Conclusion
India can lead the global discourse on food and nutrition security by showcasing home grown solutions and best practices, and championing the principle of leaving no one behind working continuously to make its food system more equitable, empowering, and inclusive.
Mains Question
Q.Food security has become increasingly challenging due to unpredictable weather conditions.Illustrate. How India can contribute to the global food security issue.
The Army has collaborated with industry and academia to build secure communications and cryptography applications. This step builds on last year’s initiative to establish a quantum computing laboratory at the military engineering institute in Mhow, Madhya Pradesh.
Quantum computing is an area of study focused on the development of computer based technologies centered around the principles of quantum theory.
Quantum computing studies computation systems that make direct use of quantum-mechanical phenomena to perform operations on data.
Classical computers encode information in bits. Each bit can take the value of 1 or 0. These 1s and 0s act as on/off switches that ultimately drive computer functions.
What is quantum Theory?
Quantum theory explains the nature and behavior of energy and matter on the quantum (atomic and subatomic) level. Quantum theory is the theoretical basis of modern physics.
The nature and behavior of matter and energy at that level is sometimes referred to as quantum physics and quantum mechanics.
What is quantum computing laboratory that the Army has set up?
Two research centres: The Army has set up a quantum computing laboratory and a centre for artificial intelligence (AI) at a military engineering institute in Madhya Pradesh. The Army will get support from National Security Council Secretariat (NSCS).
Purpose of the quantum lab: To spearhead research and training in this key developing field. It said the Indian Army is making steady and significant strides in the field of emerging technologies
To Train personnel on the cyber warfare: Training on cyber warfare is being imparted through a state of the art cyber range and cyber security labs.
The Focus areas: Key thrust areas are quantum key distribution, quantum communication and quantum computing, among others.
What is the rationale behind this development?
To provide facility centre for extensive and dedicated research: The two centres will carry out extensive research in developing transformative technologies for use by the armed forces.
To transform the current system of cryptography: Research undertaken by the Army in the field of quantum technology will help it leapfrog into the next generation of communication and transform the current system of cryptography to post-quantum cryptography.
Developing quantum resistant systems: With traditional encryption models at risk and increasing military applications of quantum technology, the deployment of quantum-resistant systems has become the need of the hour.
Vulnerable existing digital infrastructure: There is a need of upgrading current encryption standards that can be broken by quantum cryptography. Current protocols like the RSA will quickly become outdated. This means that quantum cyber attacks can potentially breach any hardened target, opening a significant vulnerability for existing digital infrastructure. Hack proofing these systems will require considerable investments.
To be in a League of nations in this sector: For example US: National Quantum Initiative Act has already allocated $1.2 billion for research in defence related quantum technology. China now hosts two of the world’s fastest quantum computers.
India’s developments in this sector so far?
National Mission on Quantum Technologies and Applications: In 2019, the Centre declared quantum technology a “mission of national importance”. The Union Budget 2020-21 had proposed to spend Rs 8,000 crore on the newly launched National Mission on Quantum Technologies and Applications.
Successfully demonstrated a Quantum key Distribution (QKD) link: In February 2022, a joint team of the Defence Research and Development Organization and IIT Delhi successfully demonstrated a QKD link between two cities in UP Prayagraj and Vindhyachal located 100 kilometres apart.
What are the challenges facing India?
Current capabilities are not sufficient: Currently, India has very few capabilities in developing advanced systems capable of withstanding quantum cyber attacks.
The china challenge: China’s quantum advances expand the spectre of quantum cyber attacks against India’s digital infrastructure, which already faces a barrage of attacks from Chinese state-sponsored hackers.
Dependence on Foreign hardware: India is heavily dependent on foreign hardware, particularly Chinese hardware, is an additional vulnerability.
How India can make its cyberspace resilient?
Procuring quantum resistant mechanism from US: India must consider procuring the United States National Security Agency’s (NSA) Suite B Cryptography Quantum-Resistant Suite as its official encryption mechanism. The NSA is developing new algorithms for their cypher suite that are resistant to quantum cyber attacks. This can then facilitate India’s official transition to quantum-resistant algorithms.
Enhancing cryptographic standards: The Indian Defence establishment can consider emulating the cryptographic standards set by the US’s National Institute of Standards and Technology (NIST) which has developed a series of encryption tools to handle quantum computer attacks. It has developed a series of four algorithms to frame a post-quantum cryptographic standard.
Diplomatic partnerships in this sector: Diplomatic partnerships with other techno-democracies countries with top technology sectors, advanced economies, and a commitment to liberal democracy can help India pool resources and mitigate emerging quantum cyber threats.
Active participation in global avenues: Active participation in the Open Quantum Safe project a global initiative started in 2016 for prototyping and integrating quantum-resistant cryptographic algorithms.
Providing funds and encouragement: India must start its national initiatives to develop quantum-resistant systems. For this, the government can fund and encourage existing open-source projects related to post-quantum cryptography.
Start implementing the capabilities: The country should start implementing and developing capabilities in quantum-resistant communications, specifically for critical strategic sectors. QKDs over long distances, especially connecting military outposts for sensitive communications, can be prioritised to ensure secure communications whilst protecting key intelligence from potential quantum cyber attacks.
Establishing nationwide network: Establish a nationwide communication network integrated with quantum cryptographic systems, thereby protecting cyberspace from any cross-border quantum cyber offensive.
Conclusion
The world is moving towards an era in which the applications of quantum physics in strategic domains will soon become a reality, increasing cyber security risks. India is getting there slowly but steadily. India needs a holistic approach to tackle these challenges. At the heart of this approach should be the focus on post-quantum cyber security.
Mains Question
Q.The world is moving towards an era in which applications of quantum physics in strategic domains will soon become a reality, increasing cyber security threats. In this context, what steps can India take to make its cyberspace resilient and quantum-resistant? Discuss.
The Reserve Bank of India will soon commence limited pilot launches of the digital rupee for specific use cases.
A concept note on the Central Bank Digital Currency was released on Friday.
It explains the objectives, choices, benefits and risks of issuing digital rupee.
What is Central Bank Digital Currency (CBDC)?
CBDC is a central bank-issued digital currency which is backed by some kind of assets in the form of either gold, currency reserves, bonds and other assets, recognised by the central banks as a monetary asset.
The present concept of CBDCs was directly inspired by Bitcoin, but a CBDC is different from virtual currency and cryptocurrency.
Cryptocurrencies are not issued by a state and lack the legal tender status declared by the government.
What are the types of E-Rupee?
Based on the usage and the functions performed by the digital rupee and considering the different levels of accessibility, CBDC can be demarcated into two broad categories:
General purpose (retail) (CBDC-R): It is an electronic version of cash primarily meant for retail transactions. It will be potentially available for use by all — private sector, non-financial consumers and businesses — and can provide access to safe money for payment and settlement as it is a direct liability of the central bank.
Wholesale (CBDC-W): It is designed for restricted access to select financial institutions. It has the potential to transform the settlement systems for financial transactions undertaken by banks in the government securities (G-Sec) segment, inter-bank market and capital market more efficiently and securely in terms of operational costs, use of collateral and liquidity management.
What are the forms of CBDC?
The central bank says e-rupee, or CBDC, can be structured as token-based or account-based.
Token-based CBDC: It would be a bearer instrument like banknotes, meaning whosoever holds the tokens at a given point in time would be presumed to own them. In this, the person receiving a token will verify that his ownership of the token is genuine. It is viewed as a preferred mode for CBDC-R as it would be closer to physical cash.
Account-based CBDC: It would require maintenance of record of balances and transactions of all holders of the CBDC and indicate the ownership of the monetary balances. In this case, an intermediary will verify the identity of an account holder. This system can be considered for CBDC-W.
What’s the model for issuance?
There are two models for issuance and management of CBDCs under the RBI’s consideration — direct model (single tier model) and indirect model (two-tier model).
Direct model: Here the central bank will be responsible for managing all aspects of the digital rupee system such as issuance, account-keeping and transaction verification.
Indirect model: It would be one where the central bank and other intermediaries (banks and any other service providers), each play their respective role. In this model, the central bank will issue CBDC to consumer’s indirectly through intermediaries and any claim by consumers will be managed by the intermediary.
What is Currency chest?
Currency in India is managed by Currency chest. Currency chest is a place where the Reserve Bank of India (RBI) stocks the money meant for banks and ATMs. These chests are usually situated on the premises of different banks but administrated by the RBI.
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.
Why is CBDC preferred over Cryptocurrency?
Sovereign guarantee: Cryptocurrencies pose risks to consumers. They do not have any sovereign guarantee and hence are not legal tender.
Market volatility: Their speculative nature also makes them highly volatile. For instance, the value of Bitcoin fell from USD 20,000 in December 2017 to USD 3,800 in November 2018.
Risk in security: A user loses access to their cryptocurrency if they lose their private key (unlike traditional digital banking accounts, this password cannot be reset).
Malware threats: In some cases, these private keys are stored by technical service providers (cryptocurrency exchanges or wallets), which are prone to malware or hacking.
Money laundering: Cryptocurrencies are more vulnerable to criminal activity and money laundering. They provide greater anonymity than other payment methods since the public keys engaging in a transaction cannot be directly linked to an individual.
Regulatory bypass: A central bank cannot regulate the supply of cryptocurrencies in the economy. This could pose a risk to the financial stability of the country if their use becomes widespread.
Power consumption: Since validating transactions is energy-intensive, it may have adverse consequences for the country’s energy security (the total electricity use of bitcoin mining, in 2018, was equivalent to that of mid-sized economies such as Switzerland).
Features of CBDC
High-security instrument: CBDC is a high-security digital instrument; like paper banknotes, it is a means of payment, a unit of account, and a store of value.
Uniquely identifiable: And like paper currency, each unit is uniquely identifiable to prevent counterfeiting.
Liability of central bank: It is a liability of the central bank just as physical currency is.
Transferability: It’s a digital bearer instrument that can be stored, transferred, and transmitted by all kinds of digital payment systems and services.
Key benefits offered
Faster system: CBDC can definitely increase the transmission of money from central banks to commercial banks and end customers much faster than the present system.
Financial inclusion: Specific use cases, like financial inclusion, can also be covered by CBDC that can benefit millions of citizens who need money and are currently unbanked or banked with limited banking services
Monetary policy facilitation: The move to bring out a CBDC could significantly improve monetary policy development in India.
Making of a regional currency: In the cross border payments domain, India can take a lead by leveraging digital Rupee especially in countries such as Bhutan, Saudia Arabia and Singapore where NPCI has existing arrangements.
Others benefits:
It is efficient than printing notes (cost of printing, transporting, and storing paper currency)
It reduces the risk of transactions
It makes tax collection transparent
Prevents money laundering
Issues involved with CBDC
Innovation with centralization: The approach of bringing a sovereign digital currency stands in stark contrast to the idea of decentralization.
Liability on RBI: when bank customers wish to convert their deposits into digital rupee, the RBI will have to take these liabilities from the books of banks and onto its own balance sheet.
Inflationary risk: Central banks would indulge in issuing more digital currencies which could potentially trigger higher inflation.
User adoption: User adoption could also pose a major setback for the smooth roll out of the CBDC in India. The main challenges would always be user adoption and security.
Reduced savings: Many, including various central bankers, fear that people may begin withdrawing money from their bank accounts as digital currencies issued by Central banks become more popular.
Volatility: the risk is higher and there is more price volatility and lesser acceptance as a money instrument globally, unless the trust factor and investor protection factors change.
Way forward
The launch of CBDCs may not be a smooth affair and still requires more clarity in India. There are still a lot of misconceptions about the concept of digital currency in the country.
The effectiveness of CBDCs will depend on aspects such as privacy design and programmability.
There is a huge opportunity for India to take a lead globally via a large-scale rollout and adoption of digital currencies.
Conclusion
RBI is creating small pivot for experimenting CBDC where financial transaction is happening through digital currency.
CBDC has to be a gradual process, various nuances has to be taken care not only about its utilization but also about the impact it will make.
More clarity on the concept in the days to come will be the key for CBDCs and much will depend on how the whole concept will evolve in India which is predominantly a paper currency market.
PM has dedicated 75 digital banking units to the nation, taking forward an announcement that was made in the 2022-23 Union Budget.
What are DBUs?
A digital banking unit is a specialized fixed point business unit or hub, housing a certain minimum digital infrastructure for delivering digital banking products and services.
It aims at servicing existing financial products and services digitally in self-service mode at any time.
The RBI has announced the guidelines for DBUs, following the report of a working group of the Indian Banks Association (IBA).
Who can set up these DBUs?
Commercial banks (other than regional rural banks, payment banks and local area banks) with past digital banking experience are permitted to open DBUs in tier 1 to tier 6 centres.
They are permitted, unless otherwise specifically restricted, without having the need to take permission from the RBI in each case.
What services will be provided by these units?
As per the RBI, each DBU must offer certain minimum digital banking products and services.
Such products should be on both liabilities and assets side of the balance sheet of the digital banking segment.
Digitally value-added services to conventional products would also qualify as such.
The services include saving bank accounts under various schemes, current accounts, fixed deposit and recurring deposit accounts, digital kits for customers, mobile banking etc.
It also includes- Internet banking, debit cards, credit cards, and mass transit system cards, digital kits for merchants, UPI QR codes, BHIM Aadhaar and point of sale (PoS).
What about lending services?
Other services include making applications for and onboarding customers for identified retail, MSME or schematic loans.
This may also include end-to-end digital processing of such loans, starting from online application to disbursal and identified government-sponsored schemes that are covered under the national portal.
How will these DBUs compete with fintechs?
Currently, fintechs operating as neobanks offer digital banking services but they do so in partnership with non-banking financial companies (NBFCs).
Some of the neobanks offering services in India are Jupiter, Fi Money, Niyo, Razorpay X.
Compared to conventional banks with online and mobile banking facilities, neobanks or digital banks excel at product innovation and offer far better digital solutions.
However, given the arrangement they, some in the industry have pegged these digital banks as “glorified digital distribution companies”.
Chinese President Xi Jinping will get an endorsement for a third term as President. His “wolf warrior” style of diplomacy has particularly attracted attention.
What does Wolf Warrior’ Diplomacy mean?
A term that gained popularity, especially after Xi became President, “wolf warrior diplomacy” is a tactic for the Chinese government to extend its ideology beyond China and counter the West and defend itself.
It is an unofficial term for the more aggressive and confrontational style of communication that Chinese diplomats have taken to in the last decade.
A 2015 Chinese action film, titled ‘Wolf Warrior’, and its sequel have served as the inspiration for the term.
The films, with their nationalist themes and dialogues, focus on Chinese fighters who frequently face off against Western mercenaries.
Do you know?
Panchasheel also called the Five Principles of Peaceful Co-existence was signed on 29p April 1954 and since then it has become a guiding principle of India’s bilateral relations with other countries.
Why China resorts to such diplomacy?
The change in strategy has been attributed to many reasons, such as:
Xi’s more authoritarian tendencies as compared to earlier leaders
Deteriorating US-China relations under former US President Donald Trump and
Coronavirus pandemic-related accusations on China, etc.
What does this look like in practice?
Some examples can be seen in the form of messaging on social media too, where Chinese officials are quick to counter any allegations by the West and proactively launch attacks.
For instance, in 2021 Chinese government spokesperson Lijian Zhao tweeted a digitally morphed photo of an Australian soldier killing a child, claiming the Australian army was killing children in Afghanistan.
This led the Australian Prime Minister to announce he would seek an official apology, but China did not budge.
But this is not limited to Western countries.
Indian experience
The new ‘wolf warrior diplomacy’ confronts head-on any criticism of China in the public sphere.
They lecture host governments and don’t always show up when ‘summoned’ by foreign offices.
Delhi has been at the receiving end for a while — especially during the recent crises of Doklam and Ladakh.
