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  • [Sansad TV] Perspective: e-RUPI: Digital Currency Push

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    Context

    • 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.

    1. 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.
    2. 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.

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  • What are Digital Banking Units (DBUs)?

    dbu

    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”.

     

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  • What is China’s ‘Wolf Warrior’ Diplomacy?

    wolf

    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:

    1. Xi’s more authoritarian tendencies as compared to earlier leaders
    2. Deteriorating US-China relations under former US President Donald Trump and
    3. 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.

     

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  • Tax on windfall profit on crude oil, export of diesel, ATF raised

    The government raised the windfall tax on domestically-produced crude oil by more than a third while doubling the rate on export of diesel and reintroducing the levy on export of jet fuel (ATF) in line with the rise in international oil prices.

    What is a Windfall Tax?

    • Windfall taxes are designed to tax the profits a company derives from an external, sometimes unprecedented event — for instance, the energy price-rise as a result of the Russia-Ukraine conflict.
    • These are profits that cannot be attributed to something the firm actively did, like an investment strategy or an expansion of business.
    • The US Congressional Research Service (CRS) defines a windfall as an “unearned, unanticipated gain in income through no additional effort or expense”.
    • One area where such taxes have routinely been discussed is oil markets, where price fluctuation leads to volatile or erratic profits for the industry.

    When did India introduce this?

    • In July this year, India announced a windfall tax on domestic crude oil producers who it believed were reaping the benefits of the high oil prices.
    • It also imposed an additional excise levy on diesel, petrol and air turbine fuel (ATF) exports.
    • Also, India’s case was different from other countries, as it was still importing discounted Russian oil.

    How is it levied?

    • Governments typically levy this as a one-off tax retrospectively over and above the normal rates of tax.
    • The Central government has introduced a windfall profit tax of ₹23,250 per tonne on domestic crude oil production, which was subsequently revised fortnightly four times so far.
    • The latest revision was on August 31, when it was hiked to ₹13,300 per tonne from ₹13,000.

    Why govt. introduced windfall tax?

    • There have been varying rationales for governments worldwide to introduce windfall taxes like:
    1. Redistribution of unexpected gains when high prices benefit producers at the expense of consumers,
    2. Funding social welfare schemes, and
    3. Supplementary revenue stream for the government

    Why are countries levying windfall taxes now?

    • Prices of oil, gas, and coal have seen sharp increases since last year and in the first two quarters of the current year, although they have reduced recently.
    • Pandemic recovery and supply issues resulting from the Russia-Ukraine conflict shored up energy demands, which in turn have driven up global prices.
    • The rising prices meant huge and record profits for energy companies while resulting in hefty gas and electricity bills for households in major and smaller economies.
    • Since the gains stemmed partly from external change, multiple analysts have called them windfall profits.

    Issues with imposing such taxes

    • Companies are confident in investing in a sector if there is certainty and stability in a tax regime.
    • Since windfall taxes are imposed retrospectively and are often influenced by unexpected events, they can brew uncertainty in the market about future taxes.
    • IMF says that taxes in response to price surges may suffer from design problems—given their expedient and political nature.
    • It added that introducing a temporary windfall profit tax reduces future investment because prospective investors will internalise the likelihood of potential taxes when making investment decisions.
    • There is another argument about what exactly constitutes true windfall profits; how can it be determined and what level of profit is normal or excessive.
    • Another issue is who should be taxed — only the big companies responsible for the bulk of high-priced sales or smaller companies as well— raising the question of whether producers with revenues or profits below a certain threshold should be exempt.

     

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  • SLBM launch by INS Arihant

    slbm

    The indigenous ballistic missile nuclear submarine INS Arihant has successfully launched a nuclear capable Submarine Launched Ballistic Missile (SLBM) in the Bay of Bengal with very high accuracy.

    About INS Arihant

    • Launched in 2009 and Commissioned in 2016, INS Arihant is India’s first indigenous nuclear powered ballistic missile.
    • It is capable submarine built under the secretive Advanced Technology Vessel (ATV) project, which was initiated in the 1990s.
    • INS Arihant and its class of submarines are classified as ‘SSBN’, which is the hull classification symbol for nuclear powered ballistic missile carrying submarines.
    • While the Navy operates the vessel, the operations of the SLBMs from the SSBN are under the purview of India’s Strategic Forces Command, which is part of India’s Nuclear Command Authority.

    Its role in India’s nuclear triad

    • In November 2019, after INS Arihant completed its first deterrence patrol, the government announced the establishment of India’s “survivable nuclear triad”.
    • It completed India’s capability of launching nuclear strikes from land, air and sea platforms.
    • This places India in the league of the few countries that can design, construct and operate Strategic Strike Nuclear Submarines (SSBN).

    Significance of the test

    • The SLBM was launched from the country’s first indigenous Strategic Strike Nuclear Submarine INS Arihant.
    • The test is significant for the nuclear ballistic submarine, or SSBN, programme, which is a crucial element of India’s nuclear deterrence capability.

    Submarine Launched Ballistic Missiles (SLBMs)

    • The SLBMs, sometimes called the ‘K’ family of missiles, have been indigenously developed by Defence Research and Development Organisation (DRDO).
    • The family is codenamed after Dr APJ Abdul Kalam, the centre figure in India’s missile and space programmes who also served as the 11th President of India.
    • Because these missiles are to be launched from submarines, they are lighter, more compact and stealthier than their land-based counterparts.
    • They are lighter compared to the Agni series of missiles which are medium and intercontinental-range nuclear-capable ballistic assets.

    Marine Version of SLBM: Sagarika

    • Part of the K family is the SLBM K-15, which is also called B-05 or Sagarika.
    • It has a range of 750 km.
    • INS Arihant can carry a dozen K-15 missiles on board. India has also developed and successfully tested K-4 missiles from the family, which have a range of 3,500 km.
    • It is also reported that more members of K-family — reportedly carrying the code names K-5 and K-6, with a range of 5,000 km and 6,000 km respectively — are under development.

    Strategic significance of the launch

    • The capability of being able to launch nuclear weapons submarine platforms has great strategic significance in the context of achieving a nuclear triad.
    • This is especially in the light of the “No First Use” policy of India.
    • The sea-based underwater nuclear capable assets significantly increases the second strike capability, and thus validates the nuclear deterrence.
    • These submarines can not only survive a first strike by the adversary, but can also launch a strike in retaliation, thus achieving ‘Credible Nuclear Deterrence’.

    Message to our hostile neighbours

    • The development of these capabilities is important in the light of India’s relations with China and Pakistan.
    • India’s capacity building on the nuclear powered submarines and of the nuclear capable missile which can be launched from them is crucial for nuclear deterrence.
    • China has deployed many of its submarines, including some that are nuclear-powered and nuclear-capable.

    Conclusion

    • In an era such as this, credible nuclear deterrence is the need of the hour.
    • The success of INS Arihant gives a fitting response to those who indulge in nuclear blackmail.

     

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  • Public dashboard to track remediation of legacy Landfills

    landfill

    The remediation of all legacy landfills in India are in full swing and a public dashboard on the progress at 2,200 such sites is in the offing.

    What are Landfills?

    • A landfill site, also known as a tip, dump, rubbish dump, garbage dump, or dumping ground, is a site for the disposal of waste materials.
    • Some landfill sites are also used for waste management purposes, such as temporary storage, consolidation and transfer, or for various stages of processing waste material, such as sorting, treatment, or recycling.

    Threats posed by landfills

    Landfills have the potential to cause a number of issues. Infrastructure disruption, such as damage to access roads by heavy vehicles, may occur amongst others.

    1) Leachate

    • When precipitation falls on open landfills, water percolates through the garbage and becomes contaminated with suspended and dissolved material, forming leachate.
    • If this is not contained it can contaminate groundwater.

    2) Decomposition gases

    • Rotting food and other decaying organic waste create decomposition gases, especially CO2 and CH4 from aerobic and anaerobic decomposition, respectively.
    • Both processes occur simultaneously in different parts of a landfill.

    3) Other threats

    • Poorly run landfills may become nuisances because of vectors such as rats and flies which can spread infectious diseases.
    • The occurrence of such vectors can be mitigated through the use of daily cover.
    • Other potential issues include wildlife disruption due to occupation of habitat and animal health disruption caused by consuming waste from landfills, dust, odour, noise pollution, and reduced local property values.

    Why clear landfills?

    • Once removed, the sites would free up 15,000 acres of land.
    • For instance, the largest such landfill, in Mumbai, is spread over 300 acres and contains 2.60 crore tonnes of waste.
    • Delhi’s three landfills — Ghazipur, Bhalswa and Okhla — contain around 2.8 crore tonnes of waste.

    What is landfill remediation?

    The most common methods for the remediation of landfills include:

    • Excavation to recover recyclable materials
    • Capping to reduce leachate generation
    • Air sparging and soil vapor extraction to capture and remediate gases and
    • Pump-and-treat of the leachate-contaminated plume

    Significance of the portal

    • Through the portal, citizens would be able to track the progress of their cities’ action plans for remediation of legacy landfills.
    • The plans cover everything from remediation to the eventual reuse of the land.

     

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  • Species in news: Neelakurinji

    neelakurinji

    As visitors keep pouring in to witness the blooming of neelakurinji on a vast area on the Kallippara hills at Santhanpara in Idukki, Kerala, an expert team has identified six varieties of the plant across the region.

    Neelakurinji

    • Kurinji or Neelakurinji (Strobilanthes kunthianus) is a shrub that is found in the shola forests of the Western Ghats in South India.
    • Nilgiri Hills, which literally means the blue mountains, got their name from the purplish blue flowers of Neelakurinji that blossoms only once in 12 years.
    • It is the most rigorously demonstrated, with documented bloomings in 1838, 1850, 1862, 1874, 1886, 1898, 1910, 1922, 1934, 1946, 1958, 1970, 1982, 1994, 2006 and 2018
    • Some Kurinji flowers bloom once every seven years, and then die. Their seeds subsequently sprout and continue the cycle of life and death.
    • The Paliyan tribal people living in Tamil Nadu used it as a reference to calculate their age.

    Threats to Neelakurinji

    • About 1,000 ha of forestland, grantis and eucalyptus plantations and grasslands have been destroyed in the fire.
    • These large-scale wildfires on the grasslands where Neelakurinji (Strobilanthes kunthiiana) blossomed widely last year after a period of 12 years could have wiped out all the seeds of the endemic flowers.
    • There are allegations that the areas coming under the proposed Kurinji sanctuary were set on fire with a motive to destroy the germination of Neelakurinji seeds.

     

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  • Ensuring Internal Security by Securing Communication Networks

    Communication

    Context

    • In a bid to upgrade the Indian Telegraph Act 1885, a law that is more than a century old, the Department of Telecommunications, or DoT, issued the Draft Indian Telecommunications Bill 2022 on 21 September. Among other things, the proposed legislation brings digital communications applications like Signal and Telegram under telecommunications law and regulation and treats them like internet and telecom service providers and broadcasters.

    What are the Current regulations of communication networks?

    • Information Technology Act 2000: Digital communication applications are currently governed by the Ministry of Electronics and Information Technology (MeitY) and the Information Technology Act 2000 where there is no licensing requirement.
    • Telecom Regulatory Authority of India (TRAI): The move has been debated for some years now, with the Telecom Regulatory Authority of India (TRAI) issuing multiple consultations on the matter, most recently in 2018.
    • National Digital Communications Policy in 2018: DoT may have legitimate grounds for extending its jurisdiction over digital communications applications, including a policy mandate established by the National Digital Communications Policy in 2018. However, there is a conflict that must be resolved, namely the jurisdictional overlap between the prospective law and the existing information technology framework.

    Communication

    Why is security of communication networks important?

    • National security: Communication networks are a part of our critical information infrastructure which was defined in the IT Act, 2000 as “the computer resource, the incapacitation or destruction of which, shall have debilitating impact on national security, economy, public health or safety.”
    • Protecting critical Infrastructure: Communications networks are crucial to the connectivity of other critical infrastructure, viz. civil aviation, shipping, railways, power, nuclear, oil and gas, finance, banking, communication, information technology, law enforcement, intelligence agencies, space, defence, and government networks. Therefore, threats can be both through the networks as well as to the networks.
    • Ready to Information Warfare (IW): Because of the increasing relevance of information technology (IT) to people’s lives, individuals who take part in IW are not all soldiers and that anybody who understands computers may become a fighter.
    • To stop the adverse impact on information system: IW is inexpensive as the targeted party can be delivered a paralysing blow through the net and it may be difficult for the latter to discern where the attack originated. Large amount of useless information can be created to block or stop the functioning of an adversary’s information system.
    • For Possible mass mobilisation: Thus, a People’s War in context of IW can be carried out by hundreds of millions of people, using open-type modern information systems. Even political mobilisation for war can be achieved via the internet, by sending patriotic e-mail messages and by setting up databases for education.

    Communication

    Why new law is necessary?

    • No obligation on communication applications: A key reason for the DoT to bring such applications under telecommunications law is national security. Licensed telecom service providers must provide law enforcement authorities access to their networks and intercept messages in the course of investigations.Conversely, there is a contention that there is no corresponding obligation on digital communications applications, potentially leaving a gap in safeguarding national security interests.
    • For increased Encryption and secrecy: A further assertion is that the encryption used by most digital communications apps hampers investigative efforts as it becomes difficult to ascertain user identity on these platforms and stop malfeasance.
    • Necessary to Ensure security: The draft telecom bill attempts to address this gap by including a provision which enables the government to undertake measures in the name of national security, including issuing directions regarding the use of any telecommunication service.
    • Licensing for more transparency: Presumably, licences issued for digital communications applications under the proposed legislation will prescribe conditions that would require these apps to give law enforcement authorities access to their systems for monitoring and intercepting communications.

    Communication

    What is the criticism over the new bill?

    • Existing law is sufficient: the IT Act already has provisions to enable lawful interception and monitoring of messages sent through digital communications applications. Under Section 69 of the IT Act, the central or state government may issue directions to do so in the interest of preserving, among other things, national security and public order. Moreover, rule 4 of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) 2021 requires digital communications applications with 50 lakh users or more to enable identification of those sending messages on their platforms.
    • Possible mass surveillance by Government: The implication here is that digital communications apps would have to break encryption and create meaningful pathways for the surveillance of their services. Importantly, while rule 4 has been challenged, it has not been stayed by any court, meaning digital communications apps must comply with it.
    • New laws will overlap with IT Act: It would appear, then, that the provisions regarding national security in the draft telecom bill and the IT Act overlap. So how would the situation be resolved, as both have clauses that give them the ability to override provisions in other laws? Specifically, both the Draft Telecom Bill, 2022 and the IT Act have a non-obstante clause, a provision that enables a statute to uphold the enforceability of its provisions over others that contradict it. Thus, in case of a contradiction between these two laws, which would prevail?
    • Introducing Digital India Act will likely to override other laws: Reports indicate that MeitY aims to introduce a newer version of the IT Act, namely the ‘Digital India Act’. This law will likely deal with matters related to lawful interception and other matters related to the governance of digital communications applications. If such a law is passed, the ‘Digital India Act’ would override the enacted version of the telecom bill.
    • Judicial challenge of acknowledgment: A situation emerges where the telecom bill, if enacted, may face a judicial challenge. Based on the analysis of the court’s treatment of special laws, this proposed legislation is unlikely to prevail as the ‘Digital India Act’ will emerge after it

    Conclusion

    • National security and privacy of citizens an equally important. One cannot be traded for other. Arbitrary power of surveillance must be regulated by independent body under the parliament which will seek the transparency and accountability from law enforcement authorities.

    Mains Question

    Q.Unchecked communication networks are grave internal security threat. Comment why new law is necessary for interception and regulation of communication networks in India?

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