9 PM Daily Current Affairs Brief – June 22, 2021

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Women as temple priests: An idea whose time has come. 

SourceThe Indian Express 

Syllabus: Role of women and women’s organization, Social empowerment 

Tags: Gender Equality, Women Empowerment, Temple Entry Movement 

Context: Tamil Nadu Hindu Religious and Charitable Endowments Minister PK Sekar Babu’s remark that women could be appointed priests in the 35,000-odd temples in the state is long overdue. 

Two major criticisms against the entry of women: a) The fear of women coming in contact with men, and b) notions of purity and pollution, especially associated with menstruation. 

Reasons to open temples to women priests: 

  • Raj Kali Kuer vs Ram Rattan Pandey 1955 case: This judgment notes that many priestly offices in Indian temples were hereditary. The Supreme Court held that women have the right to succeed to religious office. 
  • The authority of men, or of Brahmins, to conduct rituals is not vested in any religious texts including Srimad Bhagvad.  
  • Completing the Bhakti revolution: The single biggest achievement of the Bhakti movement is elevating the dignity of the emotion among the public and marginalizing the ritual conformism of Brahmanism. So, the Opening up of inner sanctum ritual to all people is in line with completing the Bhakti revolution 


Now it is time for not only Hinduism, but also for all other religions to liberate religion from patriarchy. 

The state of Indias poor must be acknowledged. 

Syllabus: Issues relating to poverty and hunger 

Tags: poverty, poverty line calculation, mass poverty, poverty estimation 

SourceThe Hindu 

Context: Trend of rising poverty in India – middle class sliding into poverty amid Covid – 19 pandemic.  

Trends signifying India’s slide into poverty. 

  • On ranking of median income, India stood at 99 among 131 countries. 
  • With a median income of $616 per annum, it was the lowest among BRICS and fell in the lower-middle-income country bracket. 
  • A decline for the first time since 1972 – 1973 in the monthly per capita consumption expenditure in FY  2017-18. 
  • India downgraded on the Global Hunger Index to ‘serious hunger’ category. 
  • India’s own health census data or the recently concluded National Family Health Survey or NFHS-5, which had worrying markers of increased malnutrition, infant mortality, and maternal health. 
  • Bangladesh recently achieved a high per capita income ($280 higher) than India. This must also be a reason for Indians to introspect.  
  • India has also slid on the sustainable development goals index (by at least two ranks last month) 
  • In 2019, the global Multidimensional Poverty Index reported that India lifted 271 million citizens out of poverty between 2006 and 2016. Since then, the International Monetary Fund, Hunger Watch, SWAN and several other surveys show a definite slide. 
  • In March, the Pew Research Center with the World Bank data estimated that ‘the number of poor in India, on the basis of an income of $2 per day or less in purchasing power parity, has more than doubled to 134 million from 60 million in just a year due to the pandemic-induced recession’.  
  • In 2020, India contributed 57.3% of the growth of the global poor. India contributed to 59.3% of the global middle class that slid into poverty. 

All of the above indicators show rising poverty in India. However, poverty line debate in India is still an unsettled one.  

Why this slide into poverty should be a cause of worry for India? 

This is certainly a cause of concern. India since independence for 25 years (1951 – 1974) saw a continuous increase in poverty. The population of the poor increased from 47% to 56%’. There has been an uninterrupted battle against poverty since the 1970s. Recent trends show India is again a “country of mass poverty” after 45 years. 

Why counting the poor is necessary? 

  1. Firstly, to get public opinion: The first is because knowing the numbers and making them public makes it possible to get public opinion to support massive and urgent cash transfers. Spain has accorded security to its gig workers by giving delivery boys the status of workers. In India too, a dramatic reorientation would get support only once numbers are honestly laid out. 
  2. Secondly, for honest evaluation of policies: The second argument for recording the data is so that all policies can be honestly evaluated based on whether they meet the needs of the majority. It Is a policy such as bank write-offs of loans amounting to ₹1.53-lakh crore last year, which helped corporates overwhelmingly, beneficial to the vast majority? Or has it been just beneficial to a thin sliver of the super-rich? This would be possible to transparently evaluate only when the numbers of the poor are known and established 
  3. Third, for informed public debates and accountability: if government data were to honestly account for the exact numbers of the poor, it may be more realistic to expect the public debate to be conducted on the concerns of the real majority. It would also create an atmosphere that demands accountability from public representatives. 
  4. Fourth, relation between rising corporate wealth and the number of poor: Fourth, wealth of richest Indian corporates has grown manifold in the past few years, even as millions of Indians have experienced a massive fall into poverty. It is well known that stock market and Indian economy are interrelated. If billionaire lists are evaluated in detail and reported upon, the country cannot shy away from counting its poor. 


Urgent solutions are needed within, and the starting point of that would be only when we know how many are poor. If we do not bother to know of the increased numbers sliding into poverty, there would be little possibility of moving toward a solution.  

Terms to know: 

Families who lost breadwinners in COVID-19 need supportive policies and a safety net 

Syllabus: Welfare schemes for vulnerable sections of the population by the Centre and States 

Tags: Social Protection in India, ex gratia compensation, Covid 19 deaths,  

SourceThe Hindu 

Why government must provide relief to families lost breadwinners? 

Context: Recently a case has been filed in the court demanding compensation for Covid-19 deaths.

Government response in court: 

  • The government said that such payments are beyond the Government’s fiscal affordability. 
  • Instead of giving one-time compensation payments, the government can deploy funds in health careenhance social protection and support economic recovery of affected communities. 

Arguments from petitioners: 

  • There is a provision in the Disaster Management Act for providing compensation 
  • In India, second wave peaked only due to poor health infrastructure and low public health expenditure. Even the Economic Survey mentioned the Failure of Public policy to increase public spending to 2.5%-3% of GDP on health. 
  • Lack of Government’s resource is not a justifiable argument, as the Centre is pursuing expensive redevelopment projects such as the Central Vista. 


  • As the center is providing free vaccines to all, now it is time to move forward and provide a road map for a universal public health system. 
  • Changes in Tax policy to facilitate the wealthiest to compensate those who have been hit the hardest. 

Families lost breadwinners need help, like the government help towards Covid orphans 

Towards a more federal structure

Syllabus: Indian Economy and issues relating to planning, mobilization, of resources 

Tages: 15th FC, Devolution of taxes, Cess, Financial Federalism,  

Source: The Hindu 

Why India needs better tax sharing mechanism between Center and States? 


The current policy of tax sharing between center and states will increase the regional differences.  

Current policy of Tax sharing mechanism in India: 

In India, direct taxes go entirely to the Central government. State governments get funds from the Central government according to the Finance Commission’s recommendations. Though this is based on a formula, often politics intervenes, leading to discrepancy in receivables of different state. 

  • After the Fifteenth Finance Commision recommendation, the Central government is supposed to distribute 41% of its gross tax revenues (reduced from 42% after the formation of new Union Territories Jammu and Kashmir) to the State governments. 

Challenges with the present tax sharing mechanism:  

  • Usually, the Central government does not meet the 41% target. Various States governments either file petitions or come into conflict with the Central government on this issue. 
  • The issue of Cess: Central government has levied cess on multiple items which adds up to over ₹3.5 lakh crore. This is not shared with the State governments. 
  • More economic power to the Central government: At an all-India level, the States get 26% of their total revenue from the Central government. Some of the so-called poorer States get up to 50% of their total revenue from the Central government. This allows ruling parties at the Centre to use these funds to their advantage. 
  • Regional disparity: Maharashtra, Delhi and Karnataka, Tamil Nadu and Gujarat contribute 72% of the tax revenue. But they receive only miniscule share. On the other hand, Uttar Pradesh, which has the largest population in India, contributes only 3.12% but gets over 17% of the revenue distributed by the Central government. 
  • Revenue distribution formula: The formula gives more weightage to population and poverty levels. The population growth rates in the southern states have come down to near zero. On the other hand, population in central and north India continues to grow. This make ever growing of cross subsidy from the south to the north.  


  • Provide greater economic power to states: This will make states to directly collect more taxes and be less dependent on the Central government. This is in line with the international practicesIn the U.S., both the federal and State governments collect direct taxes from individuals and corporations. This is true in Switzerland and some other countries as well.  

A transition to a more federal structure will allow the Centre to focus on external threats instead of internal dissensions. 

A case to decriminalize suicide

Syllabus: Welfare schemes for vulnerable sections of the population by the Centre and States 

Tags: Suicide, Section 309 IPC, Mental Health,  

SourceThe Hindu 

Context: Should we stop penalizing suicides and seek for a more permanent solution like repeal of section 309 Indian Penal Code (IPC)? 

High suicide rate in India 

India has the highest suicide rate in the Southeast Asian region, according to the World Health Organization.  

  • A total of 1,34,516 cases of suicide were reported in 2018 in India, according to the National Crime Records Bureau. While the rate of suicide was 9.9 in 2017, it increased to 10.2 in 2018. 

Reasons for suicide 

Depression, chronic ill health, guilt, trauma, substance abuse, failure in exams, and loss of loved ones are some of the reasons which influence a person’s decision to take his or her life. 

What is section 309 IPC? 

Section 309 of the Indian Penal Code provides for the penal provision for attempting suicide.  

  • If a person is suffering from any mental trauma or illness, he or she should be given reformative treatment rather than a deterrent punishment which is “simple imprisonment for a term which may extend to one year [or with fine, or with both]”. 
  • British Parliament decriminalized attempts to suicide in 1961 through the Suicide Act. In India, a Bill to repeal Section 309 was first introduced in the Rajya Sabha in 1972 but it failed to pass in the Lok Sabha because the House was dissolved. 

Judgements favoring decriminalization of suicide. 

Those who favor the penal provision quote the following judgments. 

  • Gian Kaur V. State of Punjab (1996): In this judgment court held that the “right to life is a natural right embodied in Article 21” of the Constitution but “suicide is an unnatural termination or extinction of life and, therefore, incompatible and inconsistent with the concept of right to life”. 
  • Aruna Ramchandra Shanbaug v. Union of India (2011): In this case, the Supreme Court endorsed the Gian Kaur judgment. 

Judgments against decriminalization of suicide 

Those who argue that the act of attempting suicide should not be criminalized quote following judgments: 

  • Maruti Shripati Dubal v. State of Maharashtra (1986): In this judgment, the Bombay High Court declared Section 309 unconstitutional. It said: “For example, the freedom of speech and expression includes freedom not to speak and to remain silent. The freedom of association and movement likewise includes the freedom not to join any association or to move anywhere… If this is so, logically it must follow that right to live… will include also a right not to live or not to be forced to live.” 
  • Chenna Jagadeeswar v. State of Andhra Pradesh and P. Rathinam v. Union of India (1994): In these judgments court held that Section 309 of the Indian Penal Code is a violation of Articles 14 and 21 and is void and unconstitutional. 

Does mental healthcare act offer a solution? 

To some degree but not fully.  

  • In 2017, Parliament passed the Mental Healthcare Act. Section 115 (1) of the Act provides, that any person who attempts to commit suicide shall be presumed, unless proved otherwise, to have severe stress and shall not be tried and punished under the said Code. 
  • However, this law applies only to those suffering from mental illness. There is presumption of severe stress in case of an attempt to die by suicide. 
  • But what if severe stress is not proved? 

Way forward 

We must shift from penalizing attempts to suicide or making such cases medico-legal ones. Instead, we should provide psychological or mental treatment and support to the persons affected. As the issue demands a reformative stance, we need a permanent solution like repealing Section 309 of the Indian Penal Code or striking it down. 

Terms to know 

  • Mental healthcare Act 

UAPA being misused to silence voices against injustice

Syllabus: Security challenges and their management 

Tags: UAPA, Anti-Terror Act, Habeas Corpus, NIA, National Security, Preventive Detention 

SourceThe HinduThe Indian Express 

What are the issues with UAPA? 

Context: In last week alone three important judgements were delivered on the Unlawful Activities (Prevention) Act (UAPA),1967. These are, 

  1. The grant of regular bail to three student activists in the Delhi riots case of 2020. The Delhi High Court held that the police had failed to show its accusations were prima facie true. 
  2. Acquittal of two persons in a nine-year-old UAPA case in Nanded, Maharashtra, by a special NIA (National Investigation Agency) court, for lack of evidence. 
  3. The grant of default bail by the Karnataka High Court to 115 Muslim men among 350 who were arrested in the aftermath of rioting and police firing in 2020. 

About UAPA: 

Originally enacted in 1967, the UAPA was amended to be modelled as an anti-terror law in 2004 and 2008. The significant provisions of amendments are,  

  • The period of detention is increased, enlarging the period of custody prior to which default bail cannot be granted 
  • Regular bail is subject to the satisfaction of the judge that no prima facie case exists. This makes bail a near impossibility. 
  • Lengthy periods of pre-trial incarceration for the accused who are presumed guilty of heinous terror crimes. 

Issues with UAPA: 

  • UAPA is being misused to put people like independent journalists, students and activists who are fighting for justice. 
  • The condition of UAPA prisoners: The persons arrested with UAPA were not entitled to the provisions of jail manual citing safety and security concerns. Further, there is a continuous violation of human rights inside prison. 
  • High pendency rate: The National Crime Records Bureau (NCRB) published the status of UAPA between 2016 and 2019. 
    • A total of 4,231 FIRs were filed under various sections of the UAPA, of which 112 cases have resulted in convictions. While the number of acquittals is low, at 187. 
    • The rate of pendency at the level of trial is at an average of 95.5 per cent. This  signifies the reasons for long years of undertrial imprisonment. 

Judicial interventions: 

  • In Union of India v K A Najeeb case, 2020: The Court held that despite restrictions on bail under the UAPA, constitutional courts can still grant bail on the grounds that the fundamental rights of the accused have been violated. 
  • In Gautam Navlakha v NIA. case:  The Supreme Court held that house arrest fell within the ambit of judicial custody but refused to count the days spent in house arrest as custody for the purpose of granting him default bail. 


  • UAPA should not be misused and should be used for the purpose it was made for — to put terrorists behind bars. 

Delimitation in UT of Jammu & Kashmir 

Syllabus: Election and related issues. 

Tags: Delimitation of constituencies, delimitation, Jammu & Kashmir 

SourceIndian Express 

Context: Assembly elections in Union Territory of J&K 

News: The Union government’s invitation to 14 key political leaders from Jammu and Kashmir for a meeting with the Prime Minister in the national capital. this week has led to speculation about possible scheduling of the Assembly elections 

What is delimitation and why is it needed? 

Delimitation is the act of redrawing boundaries of an Assembly or Lok Sabha seat to represent changes in population over time.  

  • Done by: Delimitation Commission, whose orders have the force of law and cannot be questioned before any court.  
  • Objective: The objective is to redraw boundaries (based on the data of the last Census) in a way so that the population of all seats, as far as practicable, be the same throughout the State. Aside from changing the limits of a constituency, the process may result in change in the number of seats in a state. 

How often has delimitation been carried out in J&K? 

  • Basis of delimitation in J&K: Delimitation of Lok Sabha seats in J&K, before its special status was scrapped, was governed by the Constitution of India, but the delimitation of the state’s Assembly seats was governed by the Jammu and Kashmir Constitution and Jammu and Kashmir Representation of the People Act, 1957. 
  • Previous delimitations of assembly seats: Assembly seats in J&K were delimited in 1963, 1973 and 1995.  
    • The last exercise was conducted by the Justice (retired) K K Gupta Commission when the state was under President’s Rule and was based on the 1981 census, which formed the basis of the state elections in 1996.  
  • No delimitation after 2001 census: There was no census in the state in 1991. Also, no Delimitation Commission was set up by the state government after the 2001 census because the J&K Assembly passed a law putting a freeze on the fresh delimitation of seats until 2026.  
    • This freeze was upheld by the Supreme Court.  
    • The J&K Assembly, at that time, had 87 seats — 46 in Kashmir, 37 in Jammu and 4 in Ladakh. Twenty-four more seats are reserved for Pakistan-occupied Kashmir. 
    • The freeze, some political parties argue, has created inequity for Jammu region. 

How J&K’s delimitation will be done now? 

After the abrogation of J&K’s special status in 2019, delimitation of Lok Sabha and Assembly seats in the newly-created Union Territory would be as per the provisions of the Indian Constitution. 

  • In March 2020, the government set up the Delimitation Commission, headed by retired Supreme Court judge Ranjana Prakash Desai, which was tasked with completing delimitation in J&K in a year. 
  • The commission has been granted a year’s extension in light of the pandemic. 

Terms to know 

  • Delimitation 
  • Delimitation Commission and relevant Constitutional provisions 

Understanding Pakistan’s Kashmir conundrum  

Syllabus: India and its neighbourhood- relations. 

Tags: India Pakistan relations, Kashmir Issue 

Source: The Indian Express 

How India-Pakistan relations impact development in Kasmir? 

Context: As the central government initiates political engagement with the leaders of Jammu and Kashmir this week, for the first time since the state was reorganized in August 2019. This is closely watched by Pakistan.  

The play of Pakistan: 

Even before the central government announcement, Pakistan went into a diplomatic overdrive to draw the world’s attention to the Kashmir. As Pakistan accuses India’s “new plans” as to move to further divide Jammu and Kashmir.  

How India-Pakistan relations evolved so far? 

  1. Endless cycle of talks-terror-talks was India’s earlier engagement with Pakistan. 
  2. The present government initiated complex diplomatic/political/military dynamic relations with Pakistan. For example, 
    • Inviting then Pakistan Prime Minister Nawaz Sharif to swearing-in ceremony in 2014. 
    • Indian Prime Minister’s landing at Pakistan at the end of 2015 on a few hours’ notice at Nawaz Sharif’s family home outside Lahore. 
    • When terror attack happened, India broke custom by inviting Pakistan to join the investigations. But Pakistan’s intelligence establishment was in no mood to cooperate. 
  3. After a major terror attack on Uri in September 2016, Indian government changed its approach and ordered the Indian Army to carry out “surgical strikes” across the Line of Control. 
  4. In the aftermath of Pulwama terror attack in February 2019, India ordered the Air Force to carry out a raid on a terror camp at Balakot in Pakistan. Pakistan’s response the next day led to the first aerial combat between the two air forces since 1971. 
  5. In 2019, India changed the constitutional status of Jammu and Kashmir, separating Ladakh from it, and declaring the two entities as union territories.  
  6. This along with Surgical strike and other prompt response by India forced Pakistan towards diplomacy rather than force.  

How the Kashmir issue in diplomacy dealt with? 

  • While China, Pakistan’s ally and a party to the Kashmir question, sought UNSC intervention, India blocked the move with support from France, Russia and the US. 
  • Pakistan also accused India at the Organisation of Islamic Cooperation.  

What are the recent positive developments in India-Pakistan relations? 

  • The security establishments in India and Pakistan embarked on backchannel diplomacy that produced quick results. 
  • India and Pakistan announced a ceasefire on the Line of Control in February. The two sides agreed to “address each other’s core issues and concerns” that tend to “disturb peace”. 
  • Pakistan’s army chief called for a reorientation of Pakistan’s national strategy away from “geopolitics” to “geoeconomics”. He also underlined the importance of good neighbourly relations with Afghanistan and India. 

Pakistan’s present dilemma on Kashmir: 

  • Even though, Kashmir is now on the bilateral agenda, Pakistan needs to prioritize on what should it focus. Either on Article 370 that defines the region’s special status in the Indian Union or Article 35A that protects the region’s demographic profile. 
  • Realists in Pakistan perhaps know that India will not restore the pre-August 2019 legal status in Kashmir 


Irrespective of the Pakistan’s debate, The central government in India owes itself a new and mutually acceptable compact with Kashmir’s political class. India’s success on that front will inevitably and irrevocably alter the terms of India’s engagement with Pakistan on Kashmir. 

Justice delivery system is headed towards a disaster. Judges must take responsibility. Here’s what they must do

Syllabus: Structure, organization and functioning of the Executive and the Judiciary 

Tags: Justice delivery system, Judiciary, Pendency of cases  

SourceTimes of India 

How to address the pendency of cases in Judiciary? 

Context: Currently, the number of pending cases in our courts is 446 lakhs and by 2022 it will cross 500 lakhs. The justice delivery system is hurtling towards a disaster.  

What possible solutions can avert the pendency? 

  1. Filling sanctioned judicial positions: A detailed analysis shows that between 2006 and 2017, the average increase in pendency was about 2.5% per year whereas the average vacancy in the sanctioned judicial positions was about 21%. If the sanctioned positions had been filled the pendency would have gone down each year.  
    1. In subordinate Courts: The subordinate judiciary is selected by a competitive examination. But they are not hiring adequate numbers. For example, Haryana Judicial Services Examination called only 9 candidates for interviews against 107 posts advertised. 
      1. Suggestions: The IT industry often hires 1,00,000 employees in a single year and they take the best on offer. The IITs admit about 11,000 students each year with the same approach and do not have more than 1% vacancies. Selection of judges should follow the same approach to fill the sanctioned positions. 
    2. For high courts: 33% positions are filled by promotion from the subordinate judiciary and the rest are recruited by direct offers to the advocates who have successful practice. A simple and sensible option would be to promote 80% from the subordinate judiciary. 
    3. The responsibility to ensure near zero vacancies should be placed on the chief justices of the high courts and CJI and they should be held accountable. Currently, nobody believes they are accountable, and filling judicial vacancies is not considered a matter of priority. 
  2. Improve working by using technology: Many government services have shown significant delivery improvement post technology adoption. Such as, public health, education, income tax returns, postal services, passport services, rail reservations etc. But still, the judicial delivery system not adopted it. The e-Committee of the Supreme Court has been in existence since 2005. It has made four outstanding recommendations which are not being followed. These recommendations include, 
    1. Computer algorithm to decide on case listing, case allocation and adjournments with only a 5% over-ride given to judges. 
    2. E-filing in all courts: The committee put together detailed SOPs (Standard Operating Procedures) on how petitions, affidavits, payment of fees can all be done electronically without lawyers or litigants having to travel to courts. This should be implemented in all seriousness. By eliminating paper, it would also save 3 lakh trees annually. 
    3. Virtual Hearings: Covid prompted the courts to adopt virtual hearings. However, virtual hearings were held only in some cases. Unless virtual hearings are adopted, the backlog of cases will cross 5 crores by 2022. 
    4. Virtual Always: Even the first and second standard students are learning in a virtual mode, then All courts must switch to virtual mode immediately and start disposing cases at their normal speed to begin with. This would make access to justice easier for lawyers and litigants 


The CJI must treats these suggestions as an urgent Suo Motu PIL (Personal Interest Litigations) and converts the Covid calamity into an opportunity. 

Counting the dead

Syllabus: Population and associated issues, Government policies and interventions for development in various sectors 

Tags: Covid related deaths, Covid, Governance, GS paper 2,  


Context: Undercounting of COVID-related deaths in India 

What is the issue? 

Due to gaps in the civil registration data, the actual death toll due to COVID is still a mystery. There’s no way to know it because the aggregated all-India civil registration data is only available until 2018. 

What is the impact of lack of data? Or why we need data? 

The lack of data means health care policy is based on guesswork 

  • Policymakers cannot prioritize, and allocate resources effectively. It is also difficult to review policy decisions, and suggest course corrections.  
  • Insurers cannot reliably compute life premiums. Even road and rail safety could improve with good, timely data inputs, given over 200,000 Indians die annually in accidents. 
  • Lack of data also creates problems when it comes to claiming citizenship. 
  • Massive undercounting of deaths: The evidence pieced together by analysts suggests massive undercounting of Covid-related deaths. The reported figures from states like Tamil Nadu, Andhra Pradesh, Gujarat, Madhya Pradesh, Karnataka, and Uttar Pradesh indicate overall excess deaths in the past two to three months.

What are the necessary steps? 

A comprehensive overhaul of the civil registration system is necessary.  

  • These data must also be openly searchable, and released as close to real time as possible.  
  • Increasing awareness: Citizens must be encouraged to register births and deaths as a matter of course. 
  • Medical certificates must also be more informative with respect to real, and underlying causes. 
  • To alleviate privacy concerns, such data could also be anonymized before release (though it could be de-anonymized by using the available open data of the voters’ lists) 


Covid tragedy can be used as an opportunity to revamp our civil registration system for a stronger, resilient and a long-term healthcare policy. 

China Surpasses India in Vaccine Delivery

Syllabus: India and its neighbourhood- relations and Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests. 

Tags: Vaccine Diplomacy, Covid Vaccine, Vaccine Maitree 

Source: – Livemint 

Synopsis: China has surpassed India in vaccine delivery to other countries. India had an opportunity to make diplomatic gains, however, it lost that to fulfil its domestic needs. 


China has surpassed India in delivering more covid-19 shots worldwide. It is despite the fact that India is the world’s top vaccine producer. 

As per UNICEF, China has donated a total of 22.37 million doses across the world in the past six months. It delivered vaccines to a total of 84 countries, mostly in Africa, Latin America and Eastern Europe.  

In Africa, nearly 37% of the vaccines supplied are through bilateral deals by Chinese companies.  

Whereas Pune-based SII donated 8.8 million doses to 48 countries in the past six months.

How China surpassed India? 

  • Firstly, Export ban:  After 2nd wave, India stopped exports of vaccines so that it is available in abundance for domestic use. India banned exports of the Oxford University-AstraZeneca developed and Serum Institute of India (SII)-manufactured Covishield vaccine. This prompted several countries to turn to China. 
  • Secondly Awaited emergency approval: Bharat Biotech, the other vaccine manufacturer from India, is still awaiting emergency approval from the World Health Organization, hindering its ability to scale up exports. 

SII was committed to delivering up to 50 million doses to 64 countries under COVAX by April. However, after India’s decision to open vaccination for all those above the age of 18, GAVI notified the potential delays. 

  CDS to chair meet on theatre commands

Syllabus: Various Security forces and agencies and their mandate. 

Tags: CDS, Theatre Command, integrated tri-service command, GS paper 3, Internal Security  

SourceThe Hindu 

Context: Chief of Defence Staff (CDS) Gen. Bipin Rawat is scheduled to chair a meeting with the Vice-Chiefs of the three services, the Chief of Integrated Defence Staff, and the representatives from the Ministries of Defence, Home and Finance. This meeting is part of a broad plan to create four integrated tri-service (theatre) commands. 

What is a theatre command? 

A theatre command is a military structure wherein all the assets of the army, air force and navy in a particular theatre of war are under the operational control of a three-star general. 

  • Currently, existing commands are of the army, navy and air force. 

What are the four integrated tri-service commands that are being planned? 

  • Air Defence theatre command 
  • Maritime theatre command 
  • Integrated eastern theatre command 
  • Integrated western theatre command 

How was the broad plan arrived at? 

  • After studying Indian and western models of war fighting for over two years, table top exercises and war games were conducted.  
  • Operational discussions were held to come up with the best model suited for India. The commands will have Indian characteristics, ethos and way of fighting. 
  • Detailed discussions were also held with the veteran community and think-tanks to brainstorm on the far-reaching decisions 

What is the Indian Air Force’s opposition to the plan? 

IAF fears that it will lose control over its assets and operations 

Is this fear justified? 

Current IAF stance of retaining most assets and operational control under the Air headquarters and the Air Chief goes against the very essence of integration and jointmanship.  

  • It is also unjustified because nothing is being changed from the ground till the level of Army commanders and equivalent. All air bases, squadrons and air assets will continue to function under IAF officials.

Terms to know 

  • Chief of Defence Staff 

Share info with Govt, ban on ‘specific’ flash sales: Move to tighten e-commerce norms

SyllabusGovernment policies and interventions for development in various sectors and issues arising out of their design and implementation. 

Tags: E Commerce rules 2020, consumer protection rules, E Commerce rules, GS Paper  

Source 1Indian Express 

Source 2Business Standard 

Source 3Livemint 

Context: Tightening of norms for e-commerce companies  

News: The Ministry of Consumer Affairs, Food and Public Distribution is planning major changes to the Consumer Protection (E-Commerce) Rules, 2020. A range of amendments has been proposed. Comments sought from relevant stakeholders by July 6. 


  • In December 2018, the Industry Department had published changes to its foreign direct investment (FDI) policy for e-commerce. These changes were introduced to tighten loopholes exploited by online marketplaces in previous policies announced by the Centre.  
    • Changes included curbing marketplaces from exercising control over inventory and restricting the relationship between the marketplace and sellers on its platform. 
  • In the proposed amendments to e-commerce norms, the Government is looking at strengthening these aspects.  
  • The proposed rules have been released at a time when DPIIT is also trying to roll out a comprehensive e-commerce policy aimed at addressing the regulatory challenges sector

What are the Consumer Protection (E-commerce) Rules? 

The Government had notified the Consumer Protection (E-commerce) Rules in July 2020, for online retailers registered in India or abroad but offering goods and services to Indian consumers 

While the original rules focused on aspects such as transparency about product information to help consumers make informed decisions, the amendments aim to curb the circumventing of other laws.  

Any violation of these rules attracts penal action under the Consumer Protection Act, 2019. 

What is the rationale behind notifying such rules and subsequent amendments? 

Government received several representations from aggrieved consumers, traders and associations complaining against widespread cheating and unfair trade practices being observed in the e-commerce ecosystem.  

  • The rapid growth of e-commerce platforms has also brought into the purview the unfair trade practices of the marketplace e-commerce entities. They frequently engage in manipulating search results to promote certain sellers, preferential treatment to some sellers, indirectly operating the sellers on their platform, affecting the free choice of consumers, selling goods close to expiration etc. 
  • For e.g.: Flipkart and Amazon India are being investigated by the Competition Commission of India (CCI) for alleged abuse of market dominance and giving preferential treatment to sellers in which they hold indirect stakes. The CCI probe also focuses on deep-discounting practices undertaken by e-commerce marketplaces, which has led to complaints from offline retailers. 

What are the key changes that have been proposed? 

According to the new provisions,  

  • Registration mandatory: E-commerce companies would need to register with the Department of Promotion for Industry and Internal Trade (DPIIT).  
  • Sharing of information:  E-commerce companies would also have to share information with the “Government agency, which is lawfully authorized for investigative or protective or cyber security activities, for the purposes of verification of identity, or for the prevention, detection, investigation, or prosecution, of offences under any law for the time being in force, or for cyber security incidents”. The information sought by the Government agency will have to be produced by the e-commerce company “within 72 hours of the receipt of an order from the said authority”. 
  • Appointment of officers for coordination with law enforcement agencies: On the lines of IT intermediary rules, e-commerce companies will need to appoint a grievance officer, a chief compliance officer, and a nodal contact person “for 24×7 coordination with law enforcement agencies”.  
    • Resident grievance officer must be a company employee and a citizen of India and serve as the nodal point of contact for law enforcement agencies. 
  • Disallowing specific flash sales: The Government has called for disallowing “specific flash sales” on e-commerce platforms. 
    • What is a flash sale? – A “flash sale” is defined as a sale organized by an e-commerce entity at significantly reduced prices, high discounts or any other such promotions or attractive offers for a predetermined period of time 
    • Why this norm? – This has been proposed to make the existing e-commerce norms more stringent, by ensuring that these firms do not use data collected through their business for “unfair advantage” and prevent any possible links they may have with traders selling goods and services on their platforms.  
    • Note: Conventional e-commerce flash sales are not banned. Only specific flash sales or back-to-back sales which limit customer choice, increase prices, and prevents a level playing field are not allowed. 
  • Push for domestic goods: E-commerce firms should mention the name and details of any importer from whom it has purchased such goods or services.  
    • These firms will also have to provide alternative suggestions to customers before they make a purchase “to ensure fair opportunity for domestic goods”. 
    • They will not only have to rank goods, but also have to come up with a framework such that the ranking does not discriminate against domestic goods and sellers. 
  • Data not to be misused: E-tailers cannot mislead consumers by manipulating search results on their platforms.  
    • They will have to ensure that marketplaces do not use any information collected through its platform for unfair advantage of its associated enterprises.  
  • Selling goods & services to sellers not allowed: No marketplace e-commerce entity shall sell goods or services to any person who is registered as a seller on its platform. 
  • Cross-selling details to be revealed: E-tailers engaged in cross-selling of goods or services will have to disclose to its users, by providing the name of the entity providing data for cross-selling, as well as the data used for cross-selling on the platform.  
    • Cross-selling is a marketing practice of selling complementary products to customers, thereby getting them to purchase more.  
    • Selling products to a consumer by “deliberate misrepresentation” of information about the goods is also not allowed. 
  • No differentiated treatment by logistics providers: No logistics service provider of a marketplace e-commerce entity shall provide differentiated treatment between sellers of the same category.  
    • Amazon India, for example, has its own logistics arm, and the provision seems to be aimed at ensuring such logistics providers are not given preference over others. 
  • Final liability on the marketplace: In the event a seller fails to deliver a good or service, the final liability will fall on the e-commerce marketplace. 

What is the applicability of the rules? 

  • The rules will be applicable for all goods and services bought or sold over digital or electronic networks, including digital products.  
  • They are valid for all models of e-commerce, including marketplace and inventory models, including multi-channel single brand retailers and single brand retailers. 

What are some concerns being expressed? 

The fact that online marketplaces will now have to offer alternatives to imported goods goes against the basic rules of ‘free market’ and ‘non-discrimination’ of sellers, which are expected to be followed by e-commerce firms. Product suggestions depend on the consumer’s preference and the goods they have frequently bought in the past. 

Lakshadweep could face major coastal erosion due to rising sea levels: study

Syllabus: Conservation, environmental pollution and degradation 

Tags: coastal erosion, Lakshadweep Islands, Climate Change, GS Paper 3, Environment,  

SourceIndian Express 

Context: Environmental impact of climate change on sea-level rise in Lakshadweep Islands. 

News: A group of scientists carried out a study to gauge the impact of climate change on sea-level rise in Lakshadweep islands 

What are the findings of the study? 

Some key findings: 

  • Sea levels around Lakshadweep are estimated to rise between 0.4 mm and 0.9 mm annually, causing coastal erosion in many of the islands, and possibly submerging the smaller islets. 
  • All islands will be affected by the sea level rise. 
  • Islands Chetlat and Amini are expected to face major land-loss. The island Minicoy and capital Kavaratti are also vulnerable to sea-level rise and expected to experience land-loss along 60% of the existing shoreline.  
    • The only airport in the archipelago, located on the southernmost tip of Agatti island, is likely to experience damage due to inundation. 
  • Fisheries, agriculture, and tourism are the three main economic sectors of the islanders, all of which are also vulnerable. 

Why this is a cause of concern? 

Lakshadweep Islands are already facing the impact of sea level rising which is taking place even now. But while many countries have coastal protection measures in place, and even India does have some coastal protection measures, these are not sufficient.  

Why are Lakshadweep Islands facing increased vulnerability to rising sea level and erosion? 

Lakshadweep group of islands face this heightened vulnerability due to its unique land use pattern wherein most of the residential areas occur along the periphery of the islands and cultivation in the center.  

What measures can government take? 

There are two kinds that the government can adopt –  

  • Soft measures, that is, the creation of mangroves, which is more effective 
  • Hard engineering solutions including the building of sea walls – a proposition which is extremely expensive. 

World Investment Report 2021 released

Syllabus:  Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 

Tags: World Investment Report, FDI in India, FDI in India 2020,  

Source 1Times of India 

Source 2Live mint 

Source 3Hindustan Times 

Source 4India Today

Context: UN Conference on Trade and Development (UNCTAD) has released its World Investment report 2021 

Key findings: – 

Specific to India

FDI in 2020 

  • India was 5th biggest recipient: India’s FDI rose 27% to $64 billion in a year when global investment flows shrank 35% to $1 trillion. This peculiar phenomenon happened due to the following reason: 
    • Mergers and acquisitions (M&A), especially in the technology space due to increased demand for digital products and services. India saw huge investments from overseas with major deals involving ICT (Implementation of information and Communication Technology), health, infrastructure, and energy. Large transactions included:  
      • the acquisition of Jio Platforms by Jaadhu, a subsidiary of Facebook 
      • the acquisition of Tower Infrastructure Trust by Canada’s Brookfield Infrastructure and GIC (Singapore) 
      • the sale of the electrical and automation division of Larsen & Toubro India 
      • Unilever India’s merger with GlaxoSmithKline Consumer Healthcare India, a subsidiary of GSK United Kingdom)  
  • India, China and Hong Kong were among the countries saw a rise in 2020. 
  • FDI outflows from South Asia fell 12% to USD 12 billion, due to a drop in investment from India. 
    • India ranked 18 out of the world’s top 20 economies for FDI outflows, with 12 billion dollars of outflows recorded from the country in 2020 as compared to 13 billion dollars in 2019. 
  • Impact of COVID: 
    • Announced greenfield projects in India contracted by 19% to USD 24 billion, and the second wave in April 2021 is affecting economic activities, which could lead to a larger contraction in 2021. 
    • Outbreak in India severely hit main investment destinations such as Maharashtra, which is home to one of the biggest automotive manufacturing clusters (Mumbai–Pune–Nasik–Aurangabad) and Karnataka (home to the Bengaluru tech hub) 
  • Prediction for 2021 
    • Report suggests that investment in new ventures in India could be hit, but the production-linked incentive scheme and high-tech sectors could help drive growth.  
    • FDI to India has been on a long-term growth trend and its market size will continue to attract market-seeking investments 
    • Investments from India are expected to stabilize in 2021, supported by the country’s resumption of free trade agreement (FTA) talks with the European Union (EU) and its strong investment in Africa.

Note: Greenfield projects are the projects which are built from scratch and are not constrained by prior work. It is constructing on unused land where there is no need to remodel or demolish an existing structure. Some examples of greenfield projects are new factories, power plants or airports which are built from scratch. Those facilities which are modified/ upgraded are called brownfield projects. 

Downward Trend in FDI Global Reasons  

  • Slowdown in existing investment projects: Lockdowns caused by Covid-19 around the world slowed down existing investment projects, and prospects of a recession led multinational enterprises (MNEs) to reassess new projects. 
  • Boost in the demand of digital services: The pandemic boosted demand for digital infrastructure and services globally. This led to higher values of greenfield FDI project announcements targeting the ICT industry, rising by more than 22% 
  • FDI inflows to developing Asia grew by 4% in 2020, making it the only region to record growth and increasing Asia’s share of global inflows to 54%. In China, FDI increased by 6%. 
  • While some of the largest economies in developing Asia such as China and India recorded FDI growth in 2020, the rest recorded a contraction. 
  • FDI inflows in Asia are expected to increase in 2021, outperforming other developing regions with a projected growth of 5–10%.

Terms to know 

  • Foreign Direct Investment (FDI) 

China’s Huawei seeks access to Trusted Source Portal


SyllabusInfrastructure: Energy, Ports, Roads, Airports, Railways etc. 

Tags: Trusted Source Portal, national security directive 

News: Chinese telecom gear giant Huawei Technologies has sought permission for access to the government’s ‘Trusted Telecom Portal’ so that it can share details about the telecom products which telecom service providers have agreed to buy from it. 

What is the ‘Trusted Telecom Portal (TTP)’? 

Government recently launched a ‘trusted telecom’ portal as a part of the national security directive on the telecommunications sector. 

  • Background: The development has come following the government’s efforts to ensure security of telecom networks, especially wrt fifth generation (5G) service. The initiative is widely believed to discourage the use of China-made gear in the country’s core networks. 
  • Under: The new portal under the Cyber wing of the National Security Council Secretariat  
  • Objective: Portal will mandate telecom service providers to use equipment through trusted or authentic sources only. 
  • How will it work? 
    • The TSPs will be able to access the Trusted Telecom Portal and indicate the telecom products they plan to buy, along with the vendor. 
    • The details of these vendors, the products, the critical components and their sources are then populated in the portal by the telecom service providers. Vendors will also be given access to the portal. 
    • The government will assess the vendors and the sources of the components to determine trusted sources and trusted products and this decision will be intimated to the vendor and the telecom provider. 

What is the National Security Directive? 

The directive makes it mandatory for providers to get a ‘trusted product’ and ‘trusted source’ stamp on all new telecom equipment they want to buy from OEMs (Original Equipment Manufacturers).  

  • It is aimed primarily to allow for closer scrutiny of Chinese telecom products and ensure that companies like Huawei and ZTE are discouraged from selling any new equipment, especially in 5G. 
  • Definition of a trusted product: The definition of ‘trusted product’ is products and their critical components which need to be procured from a trusted source. The telecom service providers will be able to access the Trusted Telecom Portal and indicate the telecom products they plan to buy, along with the vendor. 

So, why has Huawei sought permission to access TTP? 

As per Huawei and other Chinese telecom companies, the new National Security Directive on the telecom sector does not in any way prohibit them from taking part in the process of selling telecom equipment of any kind to private telcos. Hence, it has sought permission to access the portal. 

What are the new rules mandated by the govt regarding buying of telecom equipment? 

As part of the new process,  

  • Details sought: Telcos which want to buy new equipment will have to apply for approval.  
    • Equipment details: They will have to provide details of the products they want to procure. They’ll also have to provide details about the origin of the products as well as the various components going into it. Details of active components, their maker and the location of their global headquarters have to be shared and the country in which the intellectual property rights are controlled. In the case of software, the name of the software owner, its global headquarters, the name and country of the subcontractors and the country from where software will be upgraded all have to be shared. 
    • Organizational details: OEMs have to divulge a lot of detail not just about the equipment but about the organization as well, such as the names of the top 10 shareholders up to three levels, their country of origin and whether there has been any change in ownership in the last three years.  
  • Scrutiny by NSCT: Based on this data, the National Security Committee on Telecom, headed by the National Security Advisor Ajit Doval, will decide whether the equipment is trusted and from a trusted source.  
  • Mandatory replacement of existing equipment doesn’t come under these new rules. 

This new order is similar to the restrictions that countries like the US and UK have also imposed on the import of Chinese gear out of fear that it might pose a security risk to their telecom infrastructure. 

Problems with the new process 

New rules are not clear as to what percentage of a piece of equipment’s components has to come from non-Chinese sources for it to be considered trusted.  

GST: A turning point?

Syllabus: Indian Economy and issues relating to planning, mobilization, of resources 

Tags: GST, Tax to GDP ratio 

Source: Business Standard 

How to improve Tax to GDP ratio with GST? 


For the last 25 years, our tax-to-GDP ratio has been stuck at between 16 and 17 per cent. This is severely constraining our fiscal capacity to devote more resources to our underinvested sectors such as education and health.  

How to improve tax to GDP ratio with GST? 

  • The goods and services tax (GST) reforms offer the prospect of raising the tax-to-GDP ratio by at least 2 percentage points if we improve the information technology platform and address the issues of raising the incidence of duties. 


What are the reasons for Higher GST Revenues? 

The recent upsurge in GST revenue is due to the following, 

  • Better compliance prodded by the matching of invoices  
  • Better monitoring of permissions granted for registrations through physical verification of the premises  
  • Evaluation of the past income tax payment record. 
  • All this has reduced the volume of fake input invoices. 
  • Better coordination between the two tax departments — Central Board of Direct Taxes and Central Board of Indirect Taxes and Customs – has helped boost collections. This has led to smaller units covering the unincorporated and the family units to pay greater amount of taxes. 

What are the changes required in the GST to improve tax to GDP ratio? 

The Fifteenth Finance Commission in its report based on an IMF study has said that the GST incidence of duty has fallen from 14 per cent to 11.8 per cent. This needs to be corrected. There are a number of steps that need to be taken. 

  1. Large number of exemptions need to be phased away: The government need to restrict GST exemptions only to those items that were VAT (Value Added Tax) exempt in the pre-GST period. 
  2. There is also a need to revisit the GST rates on tobacco and gold 
    • India need to raise the GST rates on tobacco, which is levied on reverse charge basis, from the present level of 5 per cent. 
    • Similarly, on gold, there is a need to revise the GST rate of 3 per cent on equity consideration. As more than 80 per cent of gold and gold ornaments purchased and owned is by the top decile of the population. 
  3. There is also the need to deal with the problem of inverted duty structure in sectors such as textiles and footwear. 
  4. Finally, the real estate sector also needs to be brought under the ambit of GST. This will clean up the land market and increase the revenues more on the direct tax side as the GST rate would be more in the nature of clearing rate to offset the embedded input taxes. 


The recent upsurge in GST revenue, nudged up by better compliance, can be sustained by rate changes to increase the incidence of GST duty. Meanwhile, the buoyancy in the GST revenues can sustain higher healthcare expenditures in the short run, which is welcome indeed. 

Terms to know: 

  • Tax to GDP ratio 
  • Tax buoyancy 
  • inverted duty structure 
  • Goods and Services Tax 

 PMC Bank gets some cooperative support, but revival to take time

Syllabus: Indian Economy and issues relating to planning, mobilization, of resources 

Tags: PMC Bank, urban cooperative banks, UCBs 

SourceBusiness Standard 

What are the regulatory conditions for Urban-Cooperative Banks in India? 


The Centrum-Bharat Pe combined and takeover a bankrupt urban cooperative bank. The RBI has also granted an “in-principle” approval to Centrum Financial Services and BharatPe to set up a small finance bank (SFB). This marks the first instance of NBFCs, high-net worth individuals and fintech being allowed entry in the urban-cooperative bank (UCB) space.  

Regulatory conditions for urban-cooperative bank (UCB): 

  • The RBI in 2019 brought UCBs with assets of Rs 500 crore and above under the Central Repository of Information on Large Credits reporting framework. These banks were also brought under the ambit of the prompt corrective action (PCA) architecture. 
  • The RBI also made it mandatory for UCBs with deposits of Rs 100 crore to set up a board for management with the board of directors carrying out the due diligence for their appointment. 
  • Further, the RBI has been aligning UCB regulation with that of mainstream banks, and has done away with dual regulation with state governments making these banks relatively more attractive for those with banking ambitions. 
  • The amendment to the Banking Regulation Act (1949) came into force for UCBs with effect from June 29, 2020. Section 45 of the amendment enables the central bank to reconstruct, or amalgamate a bank, with or without implementing a moratorium, with central government approval.  
    • The word “reconstruction” has been given wider connotation to include mergers, acquisitions and takeovers or demergers. 

Major Committee recommendations regarding UCBs: 

In 2015 R Gandhi Committee recommended that a business size of Rs 20,000 crore can be considered as threshold for the voluntary conversion of multi-state UCBs into commercial banks 

Terms to Know: 

  • Urban-Cooperative Bank (UCB) 
  • Small Finance Bank (SFB) 
  • high-net worth individuals (HNIs) 
  • Banking Regulation Act 
  • NBFCs 

The issue of MSME financing gap

Syllabus: changes in industrial policy and their effects on industrial growth. 

Tags: MSME financing gap, MSME in India,  

Source – Livemint 

Synopsis: Micro, small and medium (MSME) enterprises act as the backbone of wealthy economies. However, pandemic has worsened the issue of delayed payments for their goods and services. It is causing MSME financing gap. 

What are the issues facing MSMEs? 

Micro, small and medium (MSME) enterprises are the backbone of a healthily balanced economy. 

They supply components, intermediate goods and services at competitive prices to big companies.  

However, they receive delayed payments for their goods and services. It results in large portions of working capital being blocked. This issue, coupled with often-inadequate credit at reasonable cost, leaves them financially unviable and unable to plan for growth. 

Further, second wave of covid and its associated lockdowns have again aggravated their situation.  

As per a recent report, Unlocking Credit for India’s Job Creators, the total outstanding payments to be made to registered MSMEs by buyers in India could be about ₹15 trillion. 

What are the government measures for MSMEs? 

  • The MSME Development Act of 2006 proposed guidelines for resolving the problem of delayed payments. Further, the Factoring Regulation Act, 2011, helped codify the factoring business to address payment delays. 
  • Emergency credit support measures have been announced and several compliance requirements have been temporarily relaxed. 
  • Trade receivables discounting system (TReDS): TReDS was initiated by the Reserve Bank of India (RBI). This unified platform facilitates the financing of trade receivables of MSMEs from corporate and other buyers.  
    • TReDS provides easy access to funds at market-discovered rates of interest. The MSME ministry has mandated the registry on the platform of companies with over ₹500 crore in turnover.  
  • Some purchasers avoid transacting on TReDS as they could lose the flexibility of deferring payments to MSME suppliers.  


Jayant Sinha committee: A standing committee on finance headed by Jayant Sinha has recommended integrating the TReDS platform with the GST network’s e-invoicing portal.  

  • This would grant buyers and sellers access to e-invoices through a single window for factoring and also enhance competition and liquidity, reducing the price of factoring. 
  • Apart from generating higher volumes of invoices, it would also be desirable to have more financers on these platforms. 

More NBFC Involvement: Non-banking financial companies (NBFCs), with their domain expertise in certain sectors, can easily digest the high risk of financing invoices from lower-rated firms.  

  • However, an NBFC needs to have 50% of its total assets/income from the factoring business to register on TReDS as a ‘factor’.  
  • Thus, government should allow more NBFCs to join the TReDS by amendments to Factoring Act.  

U.K. Sinha committee: U.K. Sinha committee recommended that a credit enhancement mechanism for extending guarantees to the invoices accepted by smaller/lower-rated corporates be evolved. 

Many initiatives have been taken, however the issue of MSME finance gap persists. Thus, Industry associations and chambers of commerce must get their members to embrace a culture of payments to MSMEs on time. 

There’s no easy victory in the country’s crypto cold war

Syllabus: Money and Banking, Internal Security

Tags: Crypto Currency, Cryptocurrencies in India

Source: Livemint

Synopsis: What should be India’s Policy directives with respect to Crypto currencies. 

 India’s Pessimistic attitude towards Crypto currencies 

  • The Reserve Bank of India (RBI) is pessimistic about the use of Cryptocurrencies in India. Consistently, the RBI had highlighted the disadvantages of using cryptocurrencies. 
  • Further, in 2019, a high-level intermediate committee constituted by RBI recommended a blanket ban on private cryptocurrencies in India.  
  • The pessimistic attitude towards digital currency has led banks, to distance themselves from the crypto community. For example, 
    • In May, HDFC Bank warned its customers against virtual currency transactions.  
    • Similarly, an RBI circular instructed all businesses to cease any involvement with cryptocurrencies. 
    • Moreover, State Bank of India has also taken a tough stance on cryptos.  

 Reasons for India’s Pessimistic attitude 

  • Their prices are highly volatile, and they pose the risk of a financial bubble. 
  • Anonymity in the usage that cryptos. it can serve as a safe transaction tool for cyber criminals. 
  • Potential losses of revenue for the government since it is almost impossible to track crypto payments for any tax liabilities. 

 Global Scenario 

  • Globally, cryptocurrency acceptance has been growing. For instance, El Salvador has become the first country in the world to grant Bitcoin legal-tender status.  
  • Also, countries like South Korea are implementing legislative frameworks to regulate cryptocurrencies and exchanges. 
  • However, equally there are negative sentiments towards adopting Crypto currencies as a legal Tender. For example, former US President Donald Trump didn’t back Crypto currencies. 
  • In India too, some pressure being mounted to acknowledge crypto currencies. For instance, RBI’s 2018 anti-crypto circular was struck down by the Supreme Court. Supreme court stated that RBI had failed to provide sufficient proof and detail over losses arising from crypto transactions. 

 Consequences of India’s disposition towards Crypto currencies: Aggrieved investors 

  • A research report by Bloomberg Intelligence has said that crypto’s technical outlook is strong and its price could surge to $400,000 in 2021. 
  • Investors in India fear of missing the high profits that can be earned through crypto trading. 
  • Many customers and crypto investors are taking to social media to express their discontent. 

India’s Position 

  • India’s is trying to reduce the domestic cryptocurrency sphere to a state backed CBDC (Central Bank Digital Currency). 
  • India is considering the imposition of an effective ban on ‘private’ digital assets and currencies by enacting the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. 
  • As an alternative to Crypto currencies, India is willing to introduce a central bank digital currency (CBDC). 

 Way forward 

  • The global experience suggests that a blanket ban would be ineffective, and India should consider regulating them to mitigate systemic risks. 
  • Further, public consultation along with discussion, debate should be held among all stakeholders. 

 If India’s cryptocurrency bill is enacted by Parliament in its current form, it would serve RBI’s objective. However, it won’t be a long-lasting and a pragmatic solution. 

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