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UPI: Internationalization of Digital Payments
Central Idea
- On Tuesday, the Union government unveiled India’s first cross-border real-time payments systems linkage, with the Unified Payments Interface (UPI) connecting with Singapore’s PayNow payment system.
What is Unified Payments Interface (UPI)
- UPI is India’s mobile-based fast payment system, which facilitates customers to make round-the-clock payments instantly, using a Virtual Payment Address (VPA) created by the customer.
- It eliminates the risk of sharing bank account details by the remitter.
- UPI supports both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments and it also enables a user to send or receive money.
What is PayNow?
- It is a fast payment system in Singapore.
- It enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions (NFIs) in Singapore.
- It allows users to send and receive instant funds from one bank or e-wallet account to another in Singapore by using just their mobile number, Singapore National Registration Identity Card (NRIC)/Foreign Identification Number (FIN), or VPA.
Overview: Remarkable success of UPI
- Changed the landscape of electronic payments: The introduction of UPI in 2016-17 led to a dramatic change in the electronic payments landscape of the country.
- Instrumental in dramatic growth of digital payments: Along with the JAM trinity of Jan Dhan, Aadhaar and mobile phones, this payment architecture has been instrumental in facilitating the dramatic growth of digital payments in the country, aided by a conducive regulatory framework.
- Value and volume increasing day by day: Over the years, various reports by the RBI have documented the significant increase in digital payments transactions in the country, with per person digital transactions growing both in terms of value and volume.
- Dramatic surge during the pandemic: Contactless payments also witnessed a surge during the pandemic. In fact, as per another study, roughly one-third of households surveyed had transacted digitally for the first time during the lockdown.
- Statistics for instance:
- In January 2023, roughly 8 billion transactions were carried out on the UPI platform, whose value touched almost Rs 13 lakh crore.
- In comparison, in January 2020, just prior to the pandemic, 1.3 billion transactions were routed through the UPI platform, which touched Rs 2.1 lakh crore in value.
- Aided in accelerating financial inclusion: The convenience of real-time transfer of payments, the zero-cost framework for users, the rapid expansion in the acceptance touch-points, have encouraged its widespread adoption. This has also aided in accelerating financial inclusion by providing access to financial services at low cost.
Did you know? “UPI Lite”
- UPI Lite is a on device wallet feature similar to the ones seen on popular digital payment apps such as Paytm, Freecharge, MobiKwik and others.
- The feature will allow you to make faster near real-time small value payments without internet connection via the money added in the wallet.
- In phase one, UPI Lite will process transactions in near offline mode i.e. debit offline and credit online, and at a later point, UPI Lite will process transactions in complete offline mode i.e. debit and credit both offline.
All you need to know about UPI-PayNow interlinkage facility
- How is the interlinkage benefit users?
- With this facility, funds held in bank accounts or e-wallets can be transferred to /from India using just the UPI ID, mobile number, or Virtual Payment Address (VPA), which is essentially the address to or through which you can make UPI money transfers.
- With this payment facility, both inward and outward remittances will happen instantly.
- Who can undertake remittance transactions through this facility: Account holders of participating banks and financial institutions in India and Singapore.
- Participating banks in India and Singapore:
- Banks from India are Axis Bank, DBS Bank India, ICICI Bank, Indian Bank, Indian Overseas Bank and State Bank of India (SBI). Going forward, the UPI-PayNow interlinkage will cover more banks and financial institutions.
- From Singapore, DBS Bank Singapore and Liquid Group (Non-Bank Financial Institution) are selected.
- Popular payment platforms such as PhonePe and Google Pay have been excluded from the ambit of this framework. Perhaps, over time, these platforms will also be brought under this framework, aiding in its widespread adoption.
- The daily transaction limit:
- Banks in India have not communicated about any restrictions on transfers yet.
- It is Rs 60,000 (around SGD 1,000). Initially, DBS customers can use PayNow-UPI only to transfer funds up to SGD 200 per transaction, capped at SGD 500 per day.
- There is no such communication about capping for transferring funds through Liquid Group (Non-Bank Financial Institution) to India.
Conclusion
- The UPI-PayNow interlinkage is a milestone moment for cross-border transfers. Not only India but the world has witnessed how UPI revolutionized the landscape of domestic digital payment infrastructure. With this encouraging development we are now going to see a similar revolution in the cross-border payments space as well. This internationalization of the digital payments architecture, will help bring down both the cost and the time associated with such transfers, bringing benefits to migrant workers, students, and professionals, among others.
Mains Question
Q. Recently India launched its first cross-border real-time payments systems linkage with Singapore. In this light highlight Discuss remarkable success of UPI and prospect of internationalization of UPI.
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![[Sansad TV] Perspective: India’s Defence Prowess](https://d18x2uyjeekruj.cloudfront.net/wp-content/uploads/2022/12/sansad.jpg)
[Sansad TV] Perspective: India’s Defence Prowess
Context: Aero India 2023
- Being held under the theme – The runway to a billion opportunities – Aero India 2023 is seeing the participation of over a 100 countries.
- More than 700 exhibitors from India and abroad are taking part in the event.
The PM described Aero India as an example of India’s growing potential, saying it’s not only a show, but a reflection of India’s self-confidence and capabilities.
What is Aero India?
- Aero India is a biennial air show and aviation exhibition held in Bengaluru, India at the Yelahanka Air Force Station.
- It is organised by the Defence Exhibition Organisation, Ministry of Defence.
- The Aero India is the largest air show in Asia.
- It showcases India’s defence prowess and its capabilities in the aerospace sector.
Key highlights of Aero India: Showcasing of domestic defence technologies
(1) India’s next-gen indigenous aircraft
India’s futuristic indigenous aircraft models which are in different stages of development showcased at Aero India 2023 included-
- 5th Generation Advanced Medium Combat Aircraft
- Naval Twin Engine Deck-based Fighter jet etc.
- LCA Mark2
(2) Light Combat Helicopter Prachand
- It is an Indian multi-role, light attack helicopter designed and manufactured by the Hindustan Aeronautics Limited under project LCH. It has been ordered by the Indian Air Force and the Indian Army. Its flight ceiling is the highest among all attack helicopters in the world.
(3) Jetpack Suits
- A model of a soldier wearing a jetpack being developed by an Indian start-up was inaugurated.
- The Indian Army has issued a tender to buy 48 jetpacks for troops deployed along the northern borders.
(4) Hindustan Lead in Fighter Trainer (HLFT)-42
- HLFT-42, is a project conceived by defence PSU Hindustan Aeronautics Limited (HAL)
- It is the ‘Next Gen Supersonic Trainer’ will play a critical role in modern combat aircraft training.
- It is equipped with state-of-the-art avionics like Active Electronically Scanned Array (AESA), Electronic Warfare (EW) Suite, Infrared Search and Track (IRST) with Fly By Wire control (FBW) system.
Significance of the event
- Biggest event in Asia: It is the biggest-ever event till date likely to witness the participation of 98 countries, the defence ministers of 32 countries, air chiefs of 29 countries and 73 chief executive officers of global and Indian original equipment manufacturers.
- Make in India push: The focus of Aero India-2023 this time will be on putting on display indigenous equipment/technologies and forging partnerships with foreign companies, in line with ‘Make in India, Make for the World’ vision.
- Showcased India’s manufacturing ability: The 2023 edition of Aero India showcases the country as a rising hub for manufacturing military equipment, military aircraft, helicopters and new-age avionics.
- Exchange of information: Aero India 2023 provided a unique opportunity for exchange of information, ideas and new technological developments in the aviation industry.
- Facilitation of CEOs meet: The big draw at Aero India is the ‘CEO’s Round Table’ which would allow the Ministry of Defence to showcase opportunities for global and domestic industry to invest in ‘Make in India’ initiatives.
- Defence collaboration: A Defence Ministers’ Conclave is hosted on February 14. Defence Ministers of friendly foreign countries participated in the meeting, which has been organised on the theme ‘Shared Prosperity through Enhanced Engagements in Defence (SPEED).’
- Huge investments received: The event witnessed the forging of 266 partnerships, including 201 memorandums of understanding, 53 major announcements, nine product launches and three transfers of technology (ToTs), worth around Rs 80,000 crore.
- Defence exports: Aero India is an example of the expanding capabilities of India. Many nations have extended their interests in- Light Combat Aircraft (LCA)-Tejas, HTT-40, Dornier Light Utility Helicopter (LUH), Light Combat Helicopter (LCH) and Advanced Light Helicopter (ALH),
How is India enhancing its defence prowess?
- Power projection: India has made significant strides in building its defence capabilities over the years. It has the world’s fourth-largest military, comprising of the Indian Army, Indian Navy, and the Indian Air Force, with over 1.4 million active personnel and approximately 2.4 million reserve personnel.
- Modernization of India’s defence equipment and technology: India has also been investing heavily in modernizing its defence equipment and technology to ensure the country’s national security. Some of the major achievements of the DRDO include the development of the Agni series of ballistic missiles, the BrahMos supersonic cruise missile, and the Tejas Light Combat Aircraft.
- Achievements in space technology: India has also made significant progress in the field of space technology, with the ISRO being a prominent player in the global space race. ISRO has successfully launched several satellites and is also involved in developing a manned spacecraft for future space missions.
- Multilateral defence collaborations: In recent years, India has also been actively pursuing collaborations with other countries to further enhance its defence capabilities. It has signed various defence deals with countries such as the United States, Russia, Israel, and France, among others, to procure advanced defence equipment, technology and to undertake joint military exercises.
- Realizing significance of maritime domain: India’s defence prowess also extends to its strong maritime capabilities, with the Indian Navy having a fleet of advanced warships, submarines, and maritime patrol aircraft. The Navy is also responsible for the safety and security of the Indian Ocean region, which is strategically important for the country.
Why is defence a “strategic imperative” for India?
- Protecting the ‘Emerging Economy’: A country known as the fifth largest economy of the world cannot afford to be largely dependent on big arms producing countries, especially in critical defence systems. India is able to withstand global uncertainty only because of its resilient economy.
- Global arms race: The Ukraine war has upended the global arms industry and the fast emerging Indian defence industry cannot afford to lag behind. In fact, as far as India is concerned, the Ukraine war is a stark reminder of the urgent need to reduce dependence on foreign suppliers for arms.
- Making sovereign decisions: As the Ukraine war created a dilemma before Indian policy planners to show their loyalty either to the US or Russia, the Indian government maintained neutrality and continued its cordial relationship with Russia. This is by no means possible if India were at the helms of these nations.
- Geopolitical dynamics and its uncertainty: The example of the US withdrawing its technical support to Tarapur nuclear power plant in the 1970s had haunted the Indian leadership for long. The US also imposed sanctions on the transfer of dual use technologies to Indian entities. There is no guarantee that the US side will not stop technical or maintenance support to US-supplied weapon systems.
- Obsolesces of defence alliances: If India puts all its eggs in the Russian basket, it also cannot engage in the same manner with the US. Hence, Indian policy planners are working towards making India a defence production hub for major arms companies of the world.
- Rising threats: In the current international scenario, security challenges to India are also mounting. From the Sino-Indian borders to high seas in the Indian Ocean and up to the South China Sea, India needs to be well equipped to defend its national economic and strategic interests. This can only be best served by self-reliance in defence, which will make India free from any strategic compulsions.
- Strategic autonomy: Defence prowess empowers the country with strategic autonomy, which becomes relevant in the times of any big international crisis. If India is self-reliant in defence systems, it would not be subject to domination/subjugation/manipulation by any country.
Way forward
By implementing these measures, India can move forward towards achieving self-reliance in defence, building a robust domestic defence industry and becoming a major player in the global defence industry.
- Encourage and support domestic defence production: The Indian government should continue to implement policies such as the Defence Production and Export Promotion Policy (DPEPP) and launch initiatives like the Defence Investor Cell and Innovations for Defence Excellence (iDEX) to encourage and support domestic defence production. This will help reduce dependence on foreign suppliers and build a robust domestic defence industry.
- Foster innovation and research in emerging technologies: India should focus on fostering innovation and research in emerging technologies in defence, such as artificial intelligence and unmanned systems. This will enable the country to develop cutting-edge technologies and maintain a competitive edge in the global defence industry.
- Collaborate with other countries and build strategic partnerships: India should continue to build strategic partnerships with other countries in the defence industry, both in terms of exports and collaborations. This will help the country access new technologies, markets and build its reputation as a reliable partner.
- Invest in the education and skill development of the workforce: India should invest in the education and skill development of the workforce to build a strong talent pool in the defence industry. This will ensure that the country has the necessary skills and knowledge to develop and produce critical defence systems indigenously.
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India’s Rich Biodiversity Needs Science Based Implementation
Central Idea
- The sum and variation of our biological wealth, known as biodiversity, is essential to the future of this planet. India currently hosts 17% of the planet’s human population and 17% of the global area in biodiversity hotspots, placing it at the helm to guide the planet in becoming biodiversity champions.
What is 30×30 pledge?
- The importance of our planet’s biodiversity was strongly articulated at the United Nations Biodiversity Conference in Montreal, Canada.
- On December 19, 2022, 188 country representatives adopted an agreement to halt and reverse biodiversity loss by conserving 30% of the world’s land and 30% of the world’s oceans by 2030, known as the 30×30 pledge.
Government’s efforts, Programs with potential
- Green Growth push in Budget: The Union Budget 2023 mentioned Green Growth as one of the seven priorities or Saptarishis. The emphasis on green growth is welcome news for India’s biological wealth as the country is facing serious losses of natural assets such as soils, land, water, and biodiversity.
- Green India Mission: The National Mission for a Green India aims to increase forest cover on degraded lands and protect existing forested lands.
- Green Credit Programme: The Green Credit Programme has the objective to incentivize environmentally sustainable and responsive actions by companies, individuals and local bodies.
- The MISHTI Program: The Mangrove Initiative for Shoreline Habitats & Tangible Incomes (MISHTI) is particularly significant because of the extraordinary importance of mangroves and coastal ecosystems in mitigating climate change.
- PM-PRANAM: The Prime Minister Programme for Restoration, Awareness, Nourishment, and Amelioration of Mother Earth (PM-PRANAM) for reducing inputs of synthetic fertilizers and pesticides is critical for sustaining our agriculture.
- Amrit Dharohar scheme: The Amrit Dharohar scheme is expected to encourage optimal use of wetlands, and enhance biodiversity, carbon stock, eco-tourism opportunities and income generation for local communities. If implemented in letter and spirit, Amrit Dharohar, with its emphasis on sustainability by balancing competing demands, will benefit aquatic biodiversity and ecosystem services.
- For instance: The recent intervention by the Ministry of Environment, Forest and Climate Change to stop the draining of Haiderpur, a Ramsar wetland in Uttar Pradesh, to safeguard migratory waterfowl is encouraging.
Programs must be science-based
- Evidence-based implementation: It is critical that these programs respond to the current state of the country’s biodiversity with evidence-based implementation.
- A science-based and inclusive monitoring programme: A science-based and inclusive monitoring programme is critical not only for the success of these efforts but also for documentation and distillation of lessons learnt for replication, nationally as well as globally.
- Employing modern concepts of sustainability: New missions and programmes should effectively use modern concepts of sustainability and valuation of ecosystems that consider ecological, cultural, and sociological aspects of our biological wealth.
- Setting clear boundaries and priorities: With clear system boundaries, prioritisation of the benefits to resource people, and fund-services (rather than stock-flows) as the economic foundation for generating value has enormous potential for multiple sustainable bio-economies.
- Efficient water use patterns: The future of our wetland ecosystems will depend on how we are able to sustain ecological flows through reduction in water use in key sectors such as agriculture by encouraging changes to less-water intensive crops such as millets as well as investments in water recycling in urban areas using a combination of grey and blue-green infrastructure.
- Focus must be on ecological restoration: As far as the Green India Mission is concerned, implementation should focus on ecological restoration rather than tree plantation and choose sites where it can contribute to ecological connectivity in landscapes fragmented by linear infrastructure.
- Choices should be made on evidences of resilience: Choice of species and density should be informed by available knowledge and evidence on resilience under emerging climate change and synergies and trade-offs with respect to hydrologic services.
- Careful site selection for mangrove initiative: Site selection should also be carefully considered for the mangrove initiative with a greater emphasis on diversity of mangrove species with retention of the integrity of coastal mud-flats and salt pans themselves, as they too are important for biodiversity.
- Effort in response: In response to these needs, we hope that the National Mission on Biodiversity and Human Wellbeing (Mission to green India’s economy, restore natural capital, and make India a global leader in applied biodiversity science) already approved by PM-STIAC, will be immediately launched by the government.
Did you know?
Grey and Blue-Green Infrastructure
- Grey infrastructure: It refers to traditional man-made infrastructure, such as buildings, roads, and bridges, that are designed to provide human-made services like transportation, water supply, and waste management.
- Blue-green infrastructure: It is designed to mimic the functions of natural ecosystems, such as wetlands, rivers, and forests, to provide services like stormwater management, water purification, and carbon sequestration.
- Example: It includes, Rainwater harvesting systems that capture rainwater and recharge groundwater, green roofs that provide insulation and absorb rainwater, Urban parks and green spaces that improve air quality and provide habitat for wildlife, Wetlands and retention ponds that filter pollutants and store excess water during floods
- Sustainable and resilient: Blue-green infrastructure is often seen as a more sustainable and resilient alternative to traditional grey infrastructure, as it can help to mitigate the impacts of climate change, reduce urban heat island effects, and enhance the quality of life for urban residents
Prime Minister’s Science, Technology, and Innovation Advisory Council (PM-STIAC):
- PM-STIAC is a high-level advisory body that provides strategic guidance on science, technology, and innovation to the Prime Minister of India.
- Advises the Indian Prime Minister on science and technology policy, identifying emerging areas, recommending missions and projects, and enhancing the effectiveness of science and technology to tackle national challenges.
- The council comprises eminent scientists, technologists, entrepreneurs, and policymakers who are appointed by the Prime Minister.
- PM-STIAC also serves as a forum for stakeholders from academia, industry, and government to interact and collaborate on science and technology initiatives.
Local community involvement
- Efforts must be inclusive: Each of these efforts must be inclusive of local and nomadic communities where these initiatives will be implemented.
- Traditional practices should be integrated: Traditional knowledge and practices of these communities should be integrated into the implementation plans.
Conclusion
- Each of the above-mentioned programs has the potential to greatly improve the state of our nation’s biodiversity if their implementation is based on the latest scientific and ecological knowledge.
Mains Question
Q. What is 30×30 pledge? Discuss some of the key programs taken by the government to promote green growth and biodiversity conservation.
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Russia officially ‘suspends’ New START Treaty
Central idea: The article provides an overview of the New START treaty, which was signed by Russia and the United States in 2010. It highlights how the treaty limits the number of nuclear weapons that the two countries can possess and deploy.
The New START, INF and the Open Skies …. Be clear about the differences of these treaties. For example- to check if their inception was during cold war era etc.
New START Treaty
- The New Strategic Arms Reduction Treaty (New START) pact limits the number of deployed nuclear warheads, missiles and bombers and is due to expire in 2021 unless renewed.
- The treaty limits the US and Russia to a maximum of 1,550 deployed nuclear warheads and 700 deployed missiles and bombers, well below Cold War caps.
- It was signed in 2010 by former US President Barack Obama and then-Russian President Dmitry Medvedev.
- It is one of the key controls on the superpower deployment of nuclear weapons.
Background of US-Russia Nuclear Relations
- The US formally QUIT the Intermediate-Range Nuclear Forces (INF)
- The agreement obliged the two countries to eliminate all ground-based missiles of ranges between 500 and 5,500 km.
When did nuclear disarmament begin?
- In 1985, the two countries entered into arms control negotiations on three tracks.
- The first dealt with strategic weapons with ranges of over 5,500 km, leading to the START agreement in 1991.
- It limited both sides to 1,600 strategic delivery vehicles and 6,000 warheads.
- A second track dealt with intermediate-range missiles and this led to the INF Treaty in 1987.
- A third track, Nuclear, and Space Talks was intended to address Soviet concerns regarding the U.S.’s Strategic Defence Initiative (SDI) but this did not yield any outcome.
Success of INF
- The INF Treaty was hailed as a great disarmament pact even though no nuclear warheads were dismantled.
- As it is a bilateral agreement, it did not restrict other countries.
- By 1991, the INF was implemented. USSR destroyed 1,846 and the US destroyed 846 Pershing and cruise missiles.
- Associated production facilities were also closed down.
- INF Treaty was the first pact to include intensive verification measures, including on-site inspections.
How has the nuclear behavior been?
- With the end of the Cold War and the break-up of the USSR in end-1991, former Soviet allies were joining NATO and becoming EU members.
- The U.S. was investing in missile defense and conventional global precision strike capabilities to expand its technological lead.
- In 2001, the U.S. announced its unilateral withdrawal from the 1972 Anti-Ballistic Missile Treaty (ABM Treaty).
- The US also blamed Russia for not complying with the ‘zero-yield’ standard imposed by the Comprehensive Test Ban Treaty (CTBT). This may indicate the beginning of a new nuclear arms race.
Implications of the New Start
- The 2011 New START lapsed in 2021. It may meet the fate of the INF Treaty.
- The 2018 NPR envisaged the development of new nuclear weapons, including low-yield weapons.
- China is preparing to operate its test site year-round with its goals for its nuclear force.
- CTBT requires ratification by U.S., China, and Iran, Israel and Egypt and adherence by India, Pakistan and North Korea. It is unlikely to ever enter into force.
Conclusion
- A new nuclear arms race could just be the beginning. It may be more complicated because of multiple countries being involved.
- Technological changes are bringing cyber and space domains into contention. It raises the risks of escalation.
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Key findings about Keeladi Excavation
Central idea: Keeladi is an archaeological site that has been excavated by the Tamil Nadu State Department of Archaeology since 2014. Recent excavations here has pushed the Sangam age further back.
About Keeladi
- Keeladi is a tiny hamlet in the Sivaganga district in south Tamil Nadu.
- It is about 12 km south-east to the temple city of Madurai and is located along the Vaigai River.
- The excavations here from 2015 prove that an urban civilisation existed in Tamil Nadu in the Sangam age on the banks of the Vaigai River.
How is Keeladi linked to Sangam age?
- The Sangam age is a period of history in ancient Tamil Nadu which was believed to be from the third century BCE to the third century CE.
- The name is derived from the renowned Sangam poets of Madurai from that time.
Recent findings
- In 2019, a TNSDA report dated the unearthed artefacts from Keeladi to a period between sixth century BCE and first century BCE.
- Some samples sent for carbon dating in the US, dated back to 580 BCE.
- The findings placed Keeladi artefacts about 300 years earlier than the previously believed third century BCE.
Significance of the findings
- Older than perceived: Recent finding at Keeladi has pushed the Sangam age to 800 BCE based on these archaeological findings.
- Literary evidences: Keeladi, along with other Tamil Nadu sites which have over a thousand inscribed potsherds, clearly suggest the long survival of the script.
- Substantial evidence to Sangam Age: It comes across as an industrious and advanced civilisation and has given evidence of urban life and settlements in TN during the Early Historic Period.
- Another major civilisation: The unearthed Keeladi artefacts have led academics to describe the site as part of the Vaigai Valley Civilisation. It has all the characteristics of an urban civilisation, with brick structures, luxury items and proof of internal and external trade.
- Filling in the cultural gaps: This could provide crucial evidence for understanding the missing links of the Iron Age (12th century BCE to sixth century BCE) to the Early Historic Period (sixth century BCE to fourth century BCE) and subsequent cultural developments.
Links with Indus Valley
Ans. A lot of digging and study has to be done to establish the links between these two civilisations.
- The findings have invited comparisons with the Indus Valley Civilisation while acknowledging the cultural gap of 1,000 years between the two places.
- Till now, the gap is filled with Iron Age material in south India, which serve as residual links.
- However, some of the symbols found in pot sherds of Keeladi bear a close resemblance to Indus Valley signs.
What has been unearthed so far?
- Pottery: Unearthing of heaps of pottery suggest the existence of a pottery making industry, mostly made of locally available raw materials.
- Inscriptions: Over 120 potsherds containing Tamil Brahmi inscriptions have been found.
- Jewellery: There also existed a dyeing industry and a glass bead industry. Gold ornaments, copper articles, semi-precious stones, shell bangles, ivory bangles and ivory combs reflect the artistic, culturally rich and prosperous lifestyle of the Keeladi people.
- Import of semiprecious stones: Agate and carnelian beads suggest import through commercial networks while terracotta and ivory dice, gamesmen and evidence of hopscotch have been unearthed revealing their pastime hobbies.
Recent politicization of the excavation
- The Keeladi site, since its discovery has been shrouded in controversies with several Dravidian and Left ideologues.
- They claim that the archaeological finds prove that the Indus Valley Civilisation was a “Dravidian” culture and an independent “secular” Tamil civilisation.
- The attempt to define the finds in narrow and racial terms is ideologically motivated to one, pump up Tamil exclusivist sentiments, and two, and challenge the view that sees India as one— unity in diversity.
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What is Angel Tax?
Central idea: The article provides an overview of the angel tax provisions in the Finance Bill, which were introduced in the Budget. It highlights the concerns raised by the start-up community regarding the impact of these provisions on their operations.
Angel Investment
- An angel investor is an individual who provides financial backing to early-stage startups or entrepreneurs, typically in exchange for equity in the company.
- Angel investors are typically high-net-worth individuals who invest their own personal funds, rather than investing on behalf of a firm or institution.
- Features of Angel Investing:
- Early-stage funding
- Equity investment
- High-risk, high-reward
- Active involvement
- Personal investment
- Flexible terms
- Shorter investment horizon
What is Angel Tax?
- Referred to as Angel Tax, this rule is described in Section 56(2)(viib) of the Income Tax Act, 1961.
- Essentially it’s a tax on capital receipts, unique to India in the global context.
- This clause was inserted into the act in 2012 to prevent laundering of black money, round-tripping via investments with a large premium into unlisted companies.
- The tax covers investment in any private business entity, but only in 2016 was it applied to startups.
Why was angel tax introduced?
- The complicated nature of VC fundraising with offshore entities, multiple limited partners and blind pools is contentious.
- There has been some element of money laundering or round-tripping under guise.
Details of its levy
- The Angel Tax is being levied on startups at 9% on net investments in excess of the fair market value.
- For angel investors, the amount of investment that exceeds the fair market value can be claimed for a 100% tax exemption.
- However, the investor must have a net worth of ₹2 crores or an income of more than ₹25 Lakh in the past 3 fiscal years.
Startups under scrutiny
- As more and more new-age tech startups started raising VC funding, they came under the IT department scrutiny.
- These funding deals often saw investors paying a premium above the face value or the fair market value of securities, and therefore were taxed as income for the startup.
- Between 2016 and 2019, startups urged the government to add exceptions that would allow them to be exempt from the Angel Tax.
Which startups are exempted?
- There is a clear provision that says that start-ups which are recognized by DPIIT are out of the proposal’s purview.
- The start-up recognition process is also very simple where any applicant gets it automatically.
- However, the key condition for exemption is that the aggregate amount of paid up share capital and share premium of the startup after issue or proposed issue of share does not exceed INR 25 Cr.
Concerns raised by startup
- Compliance burden: Even beyond the issue of taxation, the compliance burden on startups will potentially increase significantly under the new rules.
- Persisting slowdown: The timing of this potential tax is most worrying since it coincides with the ongoing startup funding slowdown.
- Fear of off-shoring: Entrepreneurs and investors are concerned that applying strict taxes on capital receipts without adequate exceptions will lead to startups moving overseas.
Back2Basics: Startups in India
- Startups are young companies founded to develop a unique product or service, bring it to market and make it irresistible and irreplaceable for customers.
- In India, start-up should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership.
- Turnover should be less than INR 100 Crores in any of the previous fiscal years.
- An entity shall be considered a Start-up up to 10 years from the date of its incorporation.
- The Start-up should be working towards innovation/ improvement of existing products, services, and processes and should have the potential to generate employment/ create wealth.
- An entity formed by splitting up or reconstruction of an existing business shall not be considered a “Startup”.
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Corrupt Practices according to Representation of People Act, 1951
Central idea: The article provides an overview of Sections 123 (2) and Section 123 (4) of the Representation of People’s Act, 1951. It highlights how the section makes it illegal for candidates who have been convicted of certain offenses to contest elections to Parliament and state legislatures.
Recent context: Promise of Freebies
- Recently, the Supreme Court directed to look into prayers for reconsidering its 2013 judgment in ‘S. Subramaniam Balaji vs. State of Tamil Nadu’ Case.
- The court held that promises of freebies cannot be termed a corrupt practice. However, the matter is still yet to be decided.
Illicit Practices under the RPA, 1951
- Under the provisions of the Act, an elected representative can be disqualified if convicted of certain offences on grounds of-
- Corrupt practices
- Failing to declare election expenses
- Interests in government contracts or works
What amounts to Corrupt Practices?
- Section 123 of the Act defines ‘corrupt practices’: It includes bribery, undue influence, false information, and promotion or attempted promotion of “feelings of enmity or hatred between different classes of the citizens of India on grounds of religion, race, caste, community, or language” by a candidate for the furtherance of his prospects in the election.
- Section 123 (2) deals with ‘undue influence’: It defines as “any direct or indirect interference or attempt to interfere on the part of the candidate or his agent, or of any other person, with the consent of the candidate or his election agent, with the free exercise of any electoral right.” This could also include threats of injury, social ostracism and expulsion from any caste or community.
- Section 123 (4) extends ambit of “corrupt practices”: It covers the intentional publication of false statements which can prejudice the outcome of the candidate’s election.
What practices has the court held as corrupt practices in the past?
- Jamuna Prasad Mukhariya v. Lacchi Ram, 1995: The encroachment of religion into secular activities is strictly prohibited, the court stated while adding that the same is clear from Section 123(3). However, even as far back as 1955, the Apex Court in Jamuna Prasad Mukhariya Case upheld the constitutional validity of Section 123 (3).
- SR Bommai v. Union of India, 1994: In this case, otherwise held secularism to be a part of the ‘basic structure’, the court said, “whatever the attitude of the State towards the religions, religious sects, and denominations, religion cannot be mixed with any secular activity of the State.”
- Abhiram Singh v C.D. Commachen, 2017: In 2017, a seven-judge constitution bench of the apex court held that an election will be annulled if votes are sought in the name of a candidate’s religion, race, caste, community, or language, as per Section 123 (3) which prohibits the same.
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‘HD 3226’ Wheat can beat the heat
Scientists at the Indian Council of Agricultural Research (ICAR) have developed a new variety of wheat ‘HD 3226’ that can withstand high temperatures.
HD 3226 Wheat
- The wheat, known as “HD 3226”, has been developed specifically for cultivation in the northwest region of India, where temperatures can reach up to 42 degrees Celsius.
- It took 10 years for ICAR to develop this variety.
- It has been specifically developed for cultivation in the northwest region of India.
Features of HD 3226 Wheat
- More resilient to heat stress: The HD 3226 wheat variety is reportedly more resilient to heat stress than other varieties of wheat.
- Higher yields: The HD 3226 wheat variety can produce up to 12-15% higher yields in high-temperature conditions.
Significance
- The development of this new wheat variety is particularly important given the increasing frequency of heatwaves in the region due to climate change.
- With rising temperatures, it is becoming more challenging for farmers to grow crops.
Government approval and availability
- The HD 3226 wheat variety has now been submitted to the Indian government for approval.
- Once approved, it is expected to be available to farmers in the coming years.
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Dickinsonia Fossil found in Bhimbetka turns out to be decayed beehive
A Dickinsonia fossil found at Bhimbetka, previously believed to be one of the world’s earliest animals, and has been identified as a decayed beehive.
About Bhimbetka
- The Bhimbetka rock shelters are an archaeological site in central India that spans the prehistoric Paleolithic and Mesolithic periods, as well as the historic period.
- It exhibits the earliest traces of human life in India and evidence of Stone Age starting at the site in Acheulian times.
- It is located in the Raisen District in Madhya Pradesh about 45 kilometres (28 mi) south-east of Bhopal.
- It is a UNESCO World Heritage Site that consists of seven hills and over 750 rock shelters distributed over 10 km (6.2 mi).
- At least some of the shelters were inhabited more than 100,000 years ago.
- Some of the Bhimbetka rock shelters feature prehistoric cave paintings and the earliest are about 10,000 years old (c. 8,000 BCE), corresponding to the Indian Mesolithic.
- These cave paintings show themes such as animals, early evidence of dance and hunting.
- The Bhimbetka rock shelters were found by V S Wakankar 64 years ago. Since then, thousands of researchers have visited the site, but this rare fossil went undetected.
What is Dickinsonia?
- Dickinsonia is an extinct genus of basal animal that lived during the late Ediacaran period in what is now Australia, Russia and Ukraine.
- The individual Dickinsonia typically resembles a bilaterally symmetrical ribbed oval.
- Its affinities are presently unknown; its mode of growth is consistent with a stem-group bilaterian affinity, though some have suggested that it belongs to the fungi or even an “extinct kingdom”.
- The discovery of cholesterol molecules in fossils of Dickinsonia lends support to the idea that Dickinsonia was an animal.
Cambrian Explosion and Dickinsonia
- The ‘Cambrian Explosion’ is the term given to the period of time in history when complex animals and other macroscopic organisms such as molluscs, worms, arthropods and sponges began to dominate the fossil record.
- Researchers from Australian found the Dickinsonia fossil since its tissue contained molecules of cholesterol a type of fat that is the hallmark of animal life.
Try this PYQ:
Q. Which one of the following statements is correct?
(a) Ajanta Caves lie in the gorge of Waghora River
(b) Sanchi Stupa lies in the gorge of Chambal River
(c) Pandu-lena Cave Shrines lie in the gorge of Narmada River
(d) Amaravati Stupa lies in the gorge of Godavari River
Post your answers here.
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