Daily Prelims Notes 17 November 2023

  • November 17, 2023
  • Posted by: OptimizeIAS Team
  • Category: DPN
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Daily Prelims Notes

17 November 2023

Table Of Contents

  1. How was the first vaccine for chikungunya approved?
  2. Is it better to eat plant­-based foods than rely on meat?
  3. Cryogenic upper stage of LVM3 makes a re­entry
  4. UNSC adopted resolution to call for pause in Gaza
  5. Press Council of India
  6. Tamil Nadu Governor return 10 bill, state call for special session
  7. Rich countries may have met $100 bln climate goal last year -OECD
  8. Gene therapy for sickle cell disease
  9. ASCI proposes guidelines to check greenwashing in ads
  10. Lancet Countdown report calls for climate-driven health action
  11. In parched Bundelkhand, chasing elusive diamonds and sustenance
  12. Measures to address concerns over the growth of unsecured retail loans
  13. Indian banks’ NPAs to drop to 3.5%, net interest margin to 2.9% by FY25: S&P Global
  14. As RuPay on UPI faces some roadblocks, NPCI explores corrective options
  15. Digital Personal Data Protection Act 2023 (DPDP)

 

 

1. How was the first vaccine for chikungunya approved?

Subject: Science and Tech

Section: Health

Context:

  • The world’s first vaccine for chikungunya was approved by the Food and Drug Administration (FDA) in the U.S. The vaccine has been manufactured by Valneva under the brand name Ixchiq. It has been approved for administration in people who are 18 years or older, and are at increased risk of exposure to the virus.
  • Ixchiq is administered as a single dose by injection into the muscle. It contains a live, weakened version of the chikungunya virus and may cause symptoms in the vaccine recipient similar to those experienced by people who have the disease.

About chikungunya:

  • The Chikungunya, is characterised by severe joint pain and impaired mobility, and comes with fever. It is a viral infection (CHIKV) transmitted primarily by the Aedes aegypti and Aedes albopictus mosquitoes and has been described as “an emerging global health threat.”
  • The WHO fact sheet says Chikungunya is prevalent in Africa, Asia, and the Americas; but sporadic outbreaks have been reported in other regions.
  • As per the National Centre for Vector Borne Diseases Control, India had above 93,000 suspected chikungunya cases until September in 2023.
  • Since 2004, outbreaks of CHIKV have become more frequent and widespread, partly due to viral adaptations allowing the virus to be spread more easily by the Aedes albopictus mosquitoes.
  • The joint pain is often debilitating and varies in duration; it can last for a few days, but also be prolonged over months. Other symptoms include joint swelling, muscle pain, headache, nausea, fatigue and rash.
  • While severe symptoms and deaths from chikungunya are rare and usually related to other coexisting health problems, it is believed that the numbers are generally underestimated, because chikungunya is often misdiagnosed as dengue or zika, as symptoms can seem similar.
  • As of now, there is no cure, only symptomatic relief, with analgesics to help with the pain, antipyretics for the fever, rest, and adequate fluids. Prevention includes mosquito control activities, primarily falling under public health outreach and routine civic maintenance. Individuals are also advised to use medicated mosquito nets and ensure that there is no water stagnation in any containers at home, in order to prevent the breeding of mosquitoes.

India’s Initiatives to Control Chikungunya:

  • The National Vector Borne Disease Control Programme (NVBDCP) is a comprehensive programme for prevention and control of vector borne diseases namely Malaria, Filaria, Kala-azar, Japanese Encephalitis (JE), Dengue and Chikungunya. It works under the Ministry of Health and Family Welfare.
  • Integrated Disease Surveillance Programme (IDSP) launched during 12th Plan (2012–17) under the National Health Mission, sets up a Central Surveillance Unit (CSU) at Delhi, State Surveillance Units (SSU) at all State/Union Territories (UTs) head quarters and District Surveillance Units (DSU) at all Districts. Its objectives are to strengthen/maintain decentralized laboratory based and IT enabled disease surveillance systems for epidemic prone diseases to monitor disease trends, to detect and respond to outbreaks in the early rising phase through trained Rapid Response Teams (RRTs).

Conclusion:

Inspired by the fast track pathway drawn up by research into COVID, hopefully this approval will fast track the roll out of vaccines in countries where chikungunya is more prevalent, including Brazil, Paraguay, India and parts of western Africa.

2. Is it better to eat plant­-based foods than rely on meat?

Subject : Science and Tech

Section: BIOTECHNOLOGY

Context:

A recent article turned the spotlight on dietary habits – is it better to turn to fully plant based foods and avoid meat? The article relied on several existing studies but stopped short of recommending either way.

A Comparative Analysis

  • Plant­ based diets have been known to reduce the risk of diabetes, lower LDL cholesterol and non­ HDL cholesterol, improve weight loss,  reduce progression of kidney disease and risk of stroke,  different types of cancer, especially colon cancer and breast cancer besides improving blood  pressure, irritable bowel syndrome and irritable bowel disease.
  • Plant­ based foods with fibre, protein, healthy fats and phytonutrients can improve gut health whereas animal­ based foods cause  gut dysbiosis.
  • Animal­ based foods are devoid of fibre and red meat is especially a source of saturated fat. Plant based foods also alter composition of gut microbiota as compared to animal­ based foods.
  • Since plant­ based foods contain antioxidant and anti­inflammatory properties they are better.
  • The worst culprit is processed meat, whether smoked, canned, fermented or preserved as they include added sodium and preservatives.  Chemicals such as nitrates, nitrosamines, could cause gastrointestinal  cancers as against unprocessed red meat.

What is plant-based meat?

  • “Plant-based” refers to products that bio-mimic or replicate meat, seafood, eggs, and milk derived from animals — by looking, smelling, and tasting like them.
  • Main ingredients of plant-based meat include –
  • Protein – The proteins in these foods may come from soya, peas, mushrooms, potatoes, fava beans, brown rice, or other sources.
  • Colouring – Natural pigments from vegetable extracts, spirulina, and malt mimic the red hues of meat and brown when cooked.
  • Juiciness – Plant oils may be added for juicy texture, flavour, and the appearance of marbled fat.
  • Nutrients – Some recipes contain vegetables, nuts, and seeds, along with the vitamins, minerals, and dietary fiber they provide.

3. Cryogenic upper stage of LVM3 makes a re­entry

Subject :Science and Tech

Section: SPACE TECHNOLOGY

Context:

  • The Indian Space Research Organisation (ISRO) has said that the  cryogenic upper stage of the LVM3 M4 launch vehicle which launched India’s Chandrayaan 3 moon mission has made an uncontrolled re­entry into the earth’s atmosphere on November 15.

More About News

  • This rocket body (NORAD id 57321) was part of the vehicle that successfully injected the Chandrayaan-3 spacecraft.
  • The probable impact point was predicted over the North Pacific Ocean. The final ground track did not pass over India.
  • The re-entry of the rocket body took place within 124 days of its launch.
  • The post-mission orbital lifetime of the LVM3 M4 Cryogenic upper Stage is, thus, fully compliant with the “25-year rule” for LEO (Low Earth Orbit) objects as recommended by the Inter-Agency Space Debris Coordination Committee (IADC).

What is LVM3?

  • LVM3 (erstwhile GSLV) is an expendable space launch vehicle designed, developed, and operated by the ISRO to launch satellites and other space objects into Geosynchronous Transfer Orbits.
  • It is 49.13 m tall and tallest among all other vehicles of ISRO.
  • It is a three-stage vehicle with a lift-off mass of 420 tonnes.
  • ISRO first launched LVM3 on April 18, 2001 and has made 13 launches since then.

Stages in LVM3

  • The first stage comprises S139 solid booster with 138-tonne propellant and four liquid strap-on motors, with 40-tonne propellant.
  • The second stage is a liquid engine carrying 40-tonne of liquid propellant.
  • The third stage is the indigenously built Cryogenic Upper Stage (CUS) carrying 15-tonne of cryogenic propellants.

About Space Debris?

  • Space debris refers to man-made objects in Earth’s orbit that no longer serve a useful purpose.
  • This includes defunct satellites, spent rocket stages, and fragments of debris from collisions or other events.

Threats from Space Debris:

  • Threat to Marine Life: Even when falling into the oceans, which is more likely since 70% of the earth’s surface is ocean, large objects can be a threat to marine life, and a source of pollution.
  • Threat for Operational Satellites: The floating space debris is a potential hazard for operational satellites and colliding with them can leave the satellites dysfunctional.
  • This overpopulation of space with objects and debris is referred to as Kessler Syndrome.
  • Reduction of Orbital Slots: The accumulation of space debris in specific orbital regions can limit the availability of desirable orbital slots for future missions.
  • Space Situational Awareness: The increasing amount of space debris makes it more challenging for satellite operators and space agencies to accurately track and predict the orbits of objects in space.

What are the Initiatives to Deal with Space Debris?

India:

  • In 2022, ISRO set up the System for Safe and Sustainable Operations Management (IS 4 OM) to continually monitor objects posing collision threats, predict the evolution of space debris, and mitigate the risk posed by space debris.
  • ISRO also carried out 21 collision avoidance manoeuvres of Indian operational space assets in 2022 to avoid collisions with other space objects.
  • ISRO has also set up a Centre for Space Debris Research to monitor and mitigate the threat of space debris.
  • ‘Project NETRA’ is also an early warning system in space to detect debris and other hazards to Indian satellites.

Global:

  • The Inter-Agency Space Debris Coordination Committee (IADC), an international governmental forum, was established in 1993 to coordinate efforts between spacefaring nations to address the issue of space debris.
  • The United Nations has established the Committee on the Peaceful Uses of Outer Space (COPUOS) to develop guidelines for the long-term sustainability of outer space activities, including the mitigation of space debris.
  • The European Space Agency (ESA) has launched the Clean Space initiative, aimed at reducing the amount of space debris and promoting sustainable space activities.

What are the UN’s Five Treaties to Deal with Space Activities?

  • The Outer Space Treaty 1967: Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies.
  • Rescue Agreement 1968: Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space.
  • Liability Convention 1972: It deals mainly with damage caused by space objects to other space assets, but it also applies to damage caused by falling objects on earth.
  • The Convention makes the launching country “absolutely liable” to pay compensation for any damage caused by its space object on the earth or to a flight in air. The country where the junk falls can stake a claim for compensation if it has been damaged by the falling object.
  • The Registration Convention 1976: Convention on Registration of Objects Launched into Outer Space.
  • The Moon Agreement 1979: Agreement Governing the Activities of States on the Moon and Other Celestial Bodies.
  • India is a signatory to all five of these treaties but has ratified only four. India did not ratify the Moon agreement.

4. UNSC adopted resolution to call for pause in Gaza

Subject :IR

Section: International organisation

Context: UN Security Council adopts resolution calling for urgent humanitarian pauses

More about the news:

  • The UN Security Council has adopted its first resolution since the outbreak of the Israel-Hamas war, calling for “urgent and extended humanitarian pauses” in Gaza.
  • The resolution was rejected by Israel, and the vote was 12-0, with the United States, United Kingdom, and Russia abstaining.
  • The US and UK abstained due to the resolution’s failure to condemn Hamas’ cross-border attacks, while Russia abstained because it didn’t demand a humanitarian cease-fire, contrary to Israel and the US’s stance.
  • The resolution, sponsored by Malta, emphasizes humanitarian pauses and the release of hostages,overcoming previous differences.
  • However, it doesn’t mention specific events such as the October 7 attacks in Israel or Israel’s response in Gaza.
  • The resolution is the first on the Palestinian territories since 2016, and Israel criticized it as disconnected from reality.
  • The resolution calls for humanitarian pauses, corridors in Gaza, and compliance with international law to protect civilians, especially children.
  • UN Secretary-General Antonio Guterres is to report on its implementation on November 28.
  • Israel rejected the resolution, stating it is meaningless, and UN Security Council resolutions are legally binding but may be ignored by parties.
  • The General Assembly passed a similar resolution on October 27, with Israel agreeing to four-hour pauses on November 9, but limited aid delivery has occurred, leading to a humanitarian crisis.
  • The Security Council’s resolution aims to provide respite but might not have a significant impact, with the US likely urging Israel for more flexibility on aid issues.

What is UNSC Resolutions:

  • A United Nations Security Council resolution is a United Nations resolution adopted by the fifteen members of the Security Council 
  • The UN Charter specifies in Article 27 that a draft resolution on non-procedural matters is adopted if nine or more of the fifteen Council members vote for the resolution, and if it is not vetoed by any of the five permanent members.
  • The term “resolution” does not appear in the text of the United Nations Charter.
  • Resolutions by the Security Council are legally binding.
  • In instances where the council fails to achieve consensus or secure a majority vote for a resolution, an alternative option is the issuance of a non-binding presidential statement. Such statements are adopted through consensus, serving as a means to exert political pressure. They act as a cautionary signal that the Council is closely monitoring the situation, with the implication that additional actions might be taken in the future.

Some more facts about UNSC:

  • The Security Council was established by the UN Charter in 1945. It is one of the six principal organs of the United Nations.
  • The other 5 organs of the United Nations are—the General Assembly (UNGA), the Trusteeship Council, the Economic and Social Council, the International Court of Justice, and the Secretariat.
  • Its primary responsibility is to work to maintain international peace and security.
  • The council is headquartered in New York. 
  • UNSC has 15 members of which 5 are permanent and 10 are non-permanent members. Non-permanent members elected for two-year terms by the UN General Assembly.
  • Five permanent members are- US, UK, France, Russia, and China.
  • It is the only UN body with the authority to issue binding resolutions to member states.           

5. Press Council of India

Subject : Polity

Section: National body

Context: Vice President Jagdeep Dhankhar said that now time for Press Council of India to not show teeth, but to bite.

What is Press Council of India(PCI):

  • The Press Council of India (PCI) was initially established in 1966 on the recommendations of the First Press Commission, chaired by Justice J.R. Mudholkar, as mandated by the Parliament.
  • The current council operates under the framework of the Press Council Act of 1978, serving as a statutory, quasi-judicial entity entrusted with the role of overseeing the press in India.

What is the composition of Press Council of India(PCI):

  • It consists of a Chairman and 28 other members.
  • The Chairman is nominated by a committee consisting of Chairman of Rajya Sabha, the Speaker of Lok Sabha, and one representative of the council
  • The Chairman, by convention, has been a retired judge of the Supreme Court.
  • The term of the Chairman and the members of the Council is 3 years.

What is the power of Press Council of India(PCI):

  • Adjudication Scope:
    • The Press Council of India handles complaints either against the Press for violating journalistic ethics or by the Press for interference with its freedom.
  • Jurisdiction and Powers:
    • The council possesses uniform authority across India, equivalent to the powers vested in a Civil court during the trial of a suit under the Code of Civil Procedure, 1908.
  • Legal Standing of Inquiries:
    • Every inquiry conducted by the council is legally recognized as a judicial proceeding under sections 193 and 228 of the Indian Penal Code.
  • Finality of Decisions:
    • Decisions made by the Press Council of India are considered conclusive, and they cannot be contested or challenged in any court of law.

What are the functions of Press Council of India(PCI):

  • Monitoring Media Practice:
    • The primary objective is to scrutinize media practices and oversee the freedom of the press.
  • Preserving Newspaper Independence:
    • Aiding newspapers in maintaining their independence is a key function of the organization.
  • Establishing a Code of Conduct:
    • The organization is tasked with developing a code of conduct for journalists and newspapers, aligning with high professional standards.
  • Assessing Developments Impacting News Dissemination:
    • Regularly reviewing developments that have the potential to limit the supply and dissemination of news of public interest and importance.
  • Foreign Assistance Cases:
    • Examining cases where newspapers or news agencies in India receive assistance from foreign sources, as referred by the Central Government.
  • Facilitating Journalism Education and Training:
    • Providing facilities to ensure proper education and training for individuals in the journalism profession.
  • Addressing Ownership Concentration:
    • Studying developments that may lead to the monopoly or concentration of newspaper ownership and suggesting appropriate remedies.

6. Tamil Nadu Governor return 10 bill, state call for special session

Subject :Polity

Section: Federalism

Context: Tamil Nadu Governor R N Ravi returned 10 pending Bills to the state government

More about the news:

  • Tamil Nadu Governor R N Ravi has returned 10 pending Bills to the state government, including one concerning the state government’s power to appoint university vice-chancellors.
  • This move comes days after the Supreme Court expressed concern about Governors not acting on Bills.
  • The DMK-led government, which has had disagreements with Ravi, has called a special Assembly session to address these Bills.
  • The Speaker stated that discussions on the Supreme Court’s observations, Governor, or President would not take place during the session.
  • The government had filed an affidavit accusing the Governor of neglecting constitutional duties and hindering governance, leading to a “constitutional deadlock.”
  • The Supreme Court recently ruled on a similar case in Punjab, emphasizing the importance of not casting doubt on the legislature’s session.
  • The standoff raises constitutional questions about the role and powers of Governors in approving Bills passed by the Assembly, with concerns about potential overreach by Raj Bhavan.

What is the constitutional provisions related to Governor assent to the bill:

  • Article 200 of the Constitution outlines four options available to a Governor when a legislature-passed Bill is presented for assent:
    • Grant assent immediately.
    • Withhold assent.
    • Return the Bill to the legislature, requesting reconsideration of the Bill or specific provisions.
  • If the legislature reapproves the Bill, with or without accepting Governor-suggested amendments, the Governor is constitutionally obligated to grant assent.
  • Alternatively, the Governor may reserve the Bill for the President’s consideration.
  • In the case of Presidential considerationi.eArticle 201 the decision to grant or withhold assent is made by the President. Notably, there is no specified timeframe for the President to decide on the Bill’s outcome.

Do Governors have discretion:

  • Governors did have a discretion to return Bills before the first provision in the draft Article 175(now Article 200).
  • This was amended by the Constituent Assembly in 1949.
  • The first provision to Article 200 is thus a saving clause and retains the discretion over the fate of the Bill solely in the hands of the State Cabinet.
  • Article 163 makes it clear the Governor is not expected to act independently.
  • The Supreme Court in the Shamsher Singh case verdict has held that a Governor exercises all his powers and functions conferred on him by or under the Constitution on the aid and advice of his Council of Ministers save in spheres where the Governor is required by or under the Constitution to exercise his functions in his discretion.
  • The assent or return of the Bill does not involve the discretion of individuals occupying the Governor’s post.

What are various Supreme Court observations

  • Purushothaman Nambudiri vs State of Kerala (1962):
    • The Constitution Bench clarified that no specific time limit is imposed by the Constitution for the Governor to provide assent to Bills.
    • Emphasized that the Governor must align actions with the will of the Legislature and operate in harmony with their Council of Ministers.
    • The Supreme Court  asserted that withholding assent to a law validly passed by the Legislature constitutes a direct attack on the federal structure of the Constitution.Noting that causing delays in assenting to Bills would be an arbitrary exercise, contradicting the constitutional spirit.
  • Shamsher Singh vs State of Punjab (1974):
    • A 7-judge Constitution Benchoutlined that the President and Governor should exercise their formal constitutional powers based on the advice of their Ministers, with few well-known exceptions.
  • Nabam Rebia case (2016):
    • The SC cited B R Ambedkar’s observations, stating that the Governor has no independent functions to execute but does have specific duties to perform, urging recognition of this distinction by the House.
    • Ruled that Article 163 of the Constitution does not grant the Governor general discretionary power to act against or without the advice of the Council of Ministers.
  • Rajiv Gandhi assassination case (2018):
  • The SC expressed dissatisfaction with the Governor’s delay in taking action on the release of seven convicted prisoners, citing a lapse of more than two years.

What are the other Constitutional Position related to Governor:

  • Article 153 of the Indian Constitution mandates the appointment of a Governor in each state. The 7th Amendment to the Constitution however, allows for the appointment of the same person as Governor of two or more states.
  • Article 154: The Governor shall have executive power over the state, which he shall exercise either directly or through officers subordinate to him in conformity with this Constitution.
  • Article 163: There shall be a council of ministers, led by the Chief Minister, to assist and advise the Governor in the exercise of his powers, except when he is compelled to execute his functions at his discretion.
  • Article 164: The council of ministers is collectively responsible to the state’s legislative assembly. This provision is the cornerstone of the state’s parliamentary system of governance.
  • The Governor has the same Executive, Legislative, Financial, and Judicial authorities as the President of India. However, the Governor’s power is restricted in several ways compared to that of the President, as the Governor lacks the President’s military, diplomatic, and emergency authorities.

7. Rich countries may have met $100 bln climate goal last year -OECD

Subject :Environment

Section: Climate change

Context:

  • Developed nations may have achieved their overdue promise of $100 billion to help poorer countries cope with climate change in 2022, the OECD said.

Details:

  • In 2009 at the Copenhagen conference of UNFCCC, developed countries promised that from 2020 they would transfer $100 billion a year to poorer nations hit by worsening climate change-fuelled disasters.
  • Rich countries had previously signalled the target would not be met until 2023. The target was not met in 2021. That year, wealthy nations provided $89.6 billion, an 8% increase from 2020 levels.
    • Most of the 2021 money – $73 billion – was public finance and, of this, more than two thirds was loans.
  • The OECD said poor nations’ actual climate investment needs could total $1 trillion per year by 2025.

What is the USD 100 Billion Target and why does it matter?

  • In 2009, at the UNFCCC COP15 (held in Copenhagen),
    • The developed country parties, to achieve meaningful mitigation actions and transparency on implementation, jointly set a target of USD 100 billion a year by 2020 to address the needs of developing countries.
  • The climate finance goal was then formally recognized by the UNFCCC Conference of the Parties at COP16 in Cancun.
  • At COP21 in Paris, Parties extended the $100 billion goals through 2025.
  • After COP26 there was a consensus that developed nations will double their collective provision of adaptation finance from 2019 levels by 2025, in order to achieve this balance between adaptation and mitigation.
  • Parties established the Green Climate Fund (GCF) at COP 16 in 2010 and designated it as an operating entity of the financial mechanism in 2011.

Source of this article: Reuters

8. Gene therapy for sickle cell disease

Subject :Science and Tech

Section: Health

Context:

  • Britain’s medicines regulator has authorized the world’s first gene therapy treatment for sickle cell disease.

About the new therapy:

  • Name of the therapy: Casgevy
  • Developed by: Vertex Pharmaceuticals (Europe) Ltd. and CRISPR Therapeutics.
  • Developed using: Gene editing tool CRISPR, which won its makers a Nobel prize in 2020.
  • Approved for: Patients with sickle cell disease and thalassemia who are 12 years old and over.
  • Earlier treatment: To date, bone marrow transplants, extremely arduous procedures that come with very unpleasant side effects, have been the only long-lasting treatment.

How Casgevy works?

  • It works by targeting the problematic gene in a patient’s bone marrow stem cells so that the body can make properly functioning hemoglobin.
  • Patients first receive a course of chemotherapy, before doctors take stem cells from the patient’s bone marrow and use genetic editing techniques in a laboratory to fix the gene.
  • The cells are then infused back into the patient for a permanent treatment.
  • Patients must be hospitalized at least twice — once for the collection of the stem cells and then to receive the altered cells.

About Sickle Cell Disease and Thalassemia:

  • Both sickle cell disease and thalassemia are caused by mistakes in the genes that carry hemoglobin, the protein in red blood cells that carry oxygen.
  • In people with sickle cell a genetic mutation causes the cells to become crescent-shaped, which can block blood flow and cause excruciating pain, organ damage, stroke and other problems.
  • It occurs more often among people from places where malaria is or was common, like Africa, Caribbean and India, and is also more common in certain ethnic groups, such as people of African, Middle Eastern and Indian descent. Scientists believe being a carrier of the sickle cell trait helps protect against severe malaria.
  • In people with thalassemia, the genetic mutation can cause severe anemia. Patients typically require blood transfusions every few weeks, and injections and medicines for their entire life. Thalassemia predominantly affects people of South Asian, Southeast Asian and Middle Eastern heritage.

Source of this article: AP

9. ASCI proposes guidelines to check greenwashing in ads

Subject :Polity

Section: National body

Context:

  • To ensure that advertisers’ green claims are true and evidence-based, the Advertising Standards Council of India (ASCI) has proposed guidelines that aim to bring transparency and accountability in environmental claims-based advertising.

About the draft guidelines by ASCI:

  • These guidelines also aim to check greenwashing.
  • The draft guidelines focus on various green claims, including positive impact on environment, carbon offset, and biodegradable claims.
  • These guidelines set a standard for advertisers and aim to foster a culture of transparency and authenticity in advertising in the best interest of the consumers.

Salient features of the draft guidelines:

  • The absolute claims such as ‘environment friendly’, ‘eco-friendly’ ‘sustainable’, and ‘planet friendly’ must be supported by a “high level of substantiation”.
  • The advertisers must also specify whether the environmental claim refers to the entire product, packaging or service.
  • The advertisers must disclose if the reduction in emission will occur only in two years or over a longer time period. Ads also cannot make carbon offset-related claims that represent an emission reduction that is required by law.
  • The green claims must be based on the “full life cycle” of the advertised product or service.
  • Claims that are based on only part of an advertised product or service’s life cycle must not mislead consumers about the total environmental impact of the product or service.
  • Misleading consumers:
    • Brands cannot mislead consumers about the environmental benefits by highlighting the absence of a damaging ingredient if it is not usually found in competing products.
    • Certifications and Seals of Approval should make clear which attributes of the product or service have been evaluated by the certifier, and the basis of such certification provided. Certifications and seals used in an advertisement should be from a nationally or internationally recognised certifying authority.
    • Visual elements in an ad should not give a false impression about the product/service being advertised.
    • Advertisers should refrain from making aspirational claims of their future environmental objectives, unless they have developed actionable plans.
    • For claims pertaining to the product being compostable, biodegradable, recyclable, non-toxic, free-of, advertisers should qualify the aspects to which such claims are being attributed.
    • They should be backed by “reliable scientific evidence” to indicate if the product will break down within a reasonably short period of time after disposal, and whether the product is free of elements that can lead to environmental hazards.

Advertising Standards Council of India (ASCI):

  • It is a voluntary self-regulatory organization of the advertising industry in India.
  • Established in 1985.
  • It is registered as a non-profit company under section 25 of the Company Act.
  • Headquarters: Mumbai, Maharashtra
  • It seeks to ensure that advertisements conform to its Code for Self-Regulation, which requires advertisements to be legal, decent, honest and truthful, and not hazardous or harmful while observing fairness in competition.
  • It looks into complaints across ALL MEDIA such as Print, TV, Radio, hoardings, SMS, Emailers, Internet/web-site, product packaging, brochures, promotional material and point of sale material etc.
  • It’s role has been acclaimed by various Government bodies including the Department of Consumer Affairs (DoCA), Food Safety and Standards Authority of India (FSSAI), Ministry of AYUSH as well as the Ministry of Information and Broadcasting.

Source: TH Businessline

10. Lancet Countdown report calls for climate-driven health action

Subject :IR

Section: Reports and Indices

Context:

  • The 8th annual report of the Lancet Countdown on Health and Climate Change has shed light on the alarming convergence of factors that jeopardize the well-being of individuals, public health, and healthcare systems on a global scale.

Details:

  • Climate crisis can be seen in the form of exacerbation of food insecurity, the proliferation of climate-sensitive diseases, and the increasing frequency and intensity of extreme weather events.

Lancet Countdown report:

  • It reveals that the health impacts of climate change are surging worldwide, causing a devastating toll on lives and livelihoods.
  • Adults over 65 years of age and infants under one year old, who are particularly vulnerable to extreme heat, are now experiencing twice as many heatwave days per year than they would have in 1986-2005.
  • The increasing destructiveness of extreme weather events jeopardizes water security and food production, putting millions of people at risk of malnutrition.
  • 127 million more people are experiencing moderate to severe food insecurity in 122 countries in 2021, compared to the annual numbers seen between 1981 and 2010.
  • The warmer seas have increased the area of the world’s coastline suitable for the spread of Vibrio bacteria that can cause illness and death in humans by 329km every year since 1982, putting a record 1.4 billion people at risk of diarrhoeal disease, severe wound infections, and sepsis.
  • In Europe, where Vibrio-suitable coastal waters have increased by 142km every year.
  • These rising risks of climate change are also worsening global health inequities.

About the Lancet Countdown:

  • The Lancet Countdown works to ensure that health is at the centre of how governments understand and respond to climate change.
  • Their work ranges from ensuring policymakers have access to high-quality evidence-based guidance, through to providing the health profession with the tools they need to improve public health.
  • The 2015 Lancet Commission’s conclusion – that ‘tackling climate change could be the greatest global health opportunity of the 21st century’ highlighted the need for a global monitoring system with the ability to engage policymakers and support health professionals.
  • In 2016 the Lancet Countdown: Tracking Progress on Health and Climate Change was formed to address this gap, beginning with a public consultation to identify key areas of health and climate change to track and monitor.
  • The collaboration recognises that the voice of the health profession is essential in driving forward progress on climate change and realising the health benefits of a robust response.
  • Publishing annually in The Lancet, with strategic and financial support from the Welcome Trust.
  • It is hosted by University College London.

Source: WHO

11. In parched Bundelkhand, chasing elusive diamonds and sustenance

Subject :Geography

Section: Economic geography

Manki village, Madhya Pradesh:

  • It is a tribal village in Madhya Pradesh’s Chhatarpur district, a part of the draught prone Bundelkhand region.
  • It is situated at a distance of barely two kilometres from Nainagiri, a Jain pilgrimage site.
  • It is mainly home to the Sour tribe.
  • The tribal region of Bundelkhand in M.P. is comprising of Sagar, Tikamgarh, Chhatarpur, Panna, Damoh, and Datia districts.

Dimond mining in Sagouriyavillege of M.P.:

  • Sagouriya is a village 40 km away from Manki in Buxwaha tehsil.
  • Sagouriya is deep inside a dense forest.
  • It’s one of the 15 villages‘adopted’ by the international mining giant Rio Tinto, which was granted a prospecting license in 2004.
  • Claiming there were 34 million carat diamonds worth approximately ₹25,000 crore, the company operated till 2016, it ‘adopted’ villages, including Sagouriya, enabling readily available water, modern agricultural techniques, skill training for women and youth, and health and educational facilities.
  • The State government in 2019 allotted the Bunder diamond mines project to Essel Mining, which is still waiting the environmental clearances.

Diamonds and water:

  • Bundelkhand’s other diamond mining region is Panna district.
  • The Ken river, a tributary of the Yamuna, flows through the Panna Tiger Reserve.
  • The Centre announced linking it with another of the Yamuna’s tributaries, the Betwa river.
  • As per the government, if Ken-Betwa linking project came about, it would solve Bundelkhand’s water crisis as it will provide annual irrigation to 10.62 lakh hectares, drinking water supply to a population of about 62 lakh, and also generate 103 MW of hydropower and 27 MW solar power.
  • Besides Bundelkhand, it would also benefit parts of Madhya Pradesh and Uttar Pradesh.

List of diamond mines in India:

MineState
Bunder ProjectMadhya Pradesh
GolkondaAndhra Pradesh
Kollur MineAndhra Pradesh
PannaMadhya Pradesh

12. Measures to address concerns over the growth of unsecured retail loans

Subject :Economy

Section: Monetary policy 

The Reserve Bank of India (RBI) has taken measures to address concerns over rising systemic risks associated with the growth of unsecured retail loans.

  1. Increased Risk Weights:
    • Risk weights on unsecured consumer loans, including credit cards, have been raised by 25 basis points (bps) for banks and Non-Banking Financial Companies (NBFCs).
    • Outstanding and new consumer credit exposure, excluding specific loans, will now attract risk weights of 125%, up from the current 100%.
  2. Exclusions and Inclusions:
    • For NBFCs, microfinance and Self-Help Group (SHG) loans are excluded from the higher risk weights.
    • Credit card receivables for commercial banks will now have a risk weight of 150%, up from the current 125%, while NBFCs will continue with 100%.
  3. Impact on Capital Requirements:
    • The move is expected to increase capital requirements for lenders, acting as a proactive step to enhance guardrails and strengthen internal resilience.
    • Higher capital buffers will provide lenders with better cushioning against potential increases in Non-Performing Assets (NPAs).
  4. NBFC Exposure:
    • Banks will need to set aside a 25-percentage point higher risk weight for loans to NBFCs, excluding core investment companies.
    • This applies if the current risk weight falls below 100%, based on the external credit rating assigned to the NBFC.
  5. Top-Up Loans and Sectoral Exposure:
    • All top-up loans against movable assets will be treated as ‘unsecured loans’ for credit appraisal, prudential limits, and exposure purposes.
    • Lenders are directed to review and establish board-approved limits for sectoral exposure in consumer credit, with implementation by February 29, 2024.
  6. Expected Impact:
    • The measures are anticipated to result in higher capital requirements, potentially leading to increased lending rates for borrowers.

 About Capital to Risk-Weighted Asset Ratio (CRAR):

 Definition:

  • CRAR is a financial ratio used to measure a bank’s capital in relation to its risk exposure.
  • It indicates the amount of capital a bank holds as a buffer to cover potential losses on its loans and other assets.

Calculation:

  • The CRAR ratio is calculated by dividing a bank’s capital (Tier 1 and Tier 2 capital) by its risk-weighted assets.
  • CRAR = (Tier 1 Capital + Tier 2 Capital) / Risk-Weighted Assets.

Components of Capital:

  • Tier 1 Capital (Core Capital): This includes equity capital, ordinary share capital, intangible assets, and audited revenue reserves.
  • Tier 2 Capital: This comprises unaudited retained earnings, unaudited reserves, and general loss reserves.

Importance of CRAR:

  • CRAR is a critical tool for assessing a bank’s financial health.
  • It ensures that banks have sufficient capital to absorb potential losses and continue lending safely.
  • It protects depositors and provides assurance of a bank’s ability to sustain its operations.

Benefits of CRAR:

  • Risk Management: CRAR helps banks manage and mitigate risks effectively.
  • Depositor Protection: It safeguards depositors’ funds by ensuring banks have enough capital to cover losses.
  • Sustainability: It contributes to the stability and sustainability of banks’ operations.
  • Lending Capacity:Maintaining a healthy CRAR allows banks to continue lending money to businesses and individuals.

In summary, CRAR is a key financial metric that provides insights into a bank’s financial strength and its ability to withstand financial challenges and risks.

About Capital Adequacy Ratio (CAR)

The Capital Adequacy Ratio (CAR) is a key financial metric that measures a bank’s capital adequacy and its ability to absorb potential losses arising from various risks.

It is a crucial component of the regulatory framework designed to ensure the stability and soundness of financial institutions. The CAR is expressed as a percentage and is calculated by dividing a bank’s capital by its risk-weighted assets.

The formula for calculating the Capital Adequacy Ratio is as follows:

CAR=(Tier 1 Capital + Tier 2 Capital/Risk-Weighted Assets)×100

  1. Tier 1 Capital:
    • Tier 1 capital, also known as the “core capital,” includes the most reliable and liquid forms of capital. Common elements of Tier 1 capital include common equity, retained earnings, and certain qualifying preferred stock.
  2. Tier 2 Capital:
    • Tier 2 capital consists of subordinated debt, undisclosed reserves, and other less liquid forms of capital. It serves as a supplementary layer of protection for depositors and creditors in case of a bank’s financial distress.
  3. Risk-Weighted Assets (RWA):
    • Risk-weighted assets represent a bank’s total assets adjusted for risk.
    • Different categories of assets carry different risk weights, reflecting the varying degrees of risk associated with each type of asset. The risk weights are determined by regulatory authorities based on the perceived riskiness of the assets.
  4. Calculation Basis:
    • The numerator (Tier 1 Capital + Tier 2 Capital) represents the bank’s total capital, while the denominator (Risk-Weighted Assets) adjusts this total for the riskiness of the bank’s asset portfolio. The resulting ratio is expressed as a percentage.
  5. Regulatory Requirement:
    • Regulatory authorities, such as central banks and banking regulators, set minimum capital adequacy requirements that banks must meet. Common international standards, such as those outlined in the Basel Accords (Basel I, II, and III), provide guidelines for calculating and maintaining the Capital Adequacy Ratio.
  6. Minimum Requirement:
    • The minimum acceptable level of CAR is specified by regulators to ensure that banks have a sufficient cushion to absorb potential losses and withstand financial shocks.

Core Investment Companies (CICs) – A Quick Overview

  1. Specialized NBFCs: CICs are specialized Non-Banking Financial Companies (NBFCs) with a specific focus.
  2. Asset Size Requirement: To be registered with the RBI as a CIC, a company needs to have an asset size exceeding Rs 100 crore.
  3. Primary Business: The main business of CICs is the acquisition of shares and securities. However, specific conditions apply to their investment portfolio.
  4. Investment Conditions: CICs are required to have at least 90% of their net assets invested in equity shares, preference shares, bonds, debentures, debt, or loans in group companies.
  5. Group Companies: Group companies are defined as entities related through various relationships such as subsidiaries, joint ventures, associates, promoter-promotee relationships (for listed companies), related parties, common brand names, and investments in equity shares of 20% and above.

In summary, Core Investment Companies are specialized NBFCs with a significant asset size that primarily engage in acquiring shares and securities, subject to specific investment conditions primarily related to group companies.

13. Indian banks’ NPAs to drop to 3.5%, net interest margin to 2.9% by FY25: S&P Global

Subject: Economy

Section: Monetary policy 

NPA Projections:

  • S&P Global projects Indian banks’ nonperforming assets (NPAs) to drop to 5% by FY 2023–24 and further to 3.5% by FY 2024–25.
  • Anticipates a decline in weak loans to 5% of gross loans by March 31, 2025.
  • Attributes improvement to factors like healthy corporate balance sheets, tighter underwriting standards, and enhanced risk management practices.

Key Factors Impacting Banking Sector:

  • Expects slower global growth and external demand, but believes India’s domestically oriented economy will be less affected.
  • Forecasts credit costs to normalize to 1.2% for the next couple of years.
  • Expects the RBI Governor-led Monetary Policy Committee (MPC) to maintain a pause on interest rates.
  • Does not anticipate a significant rise in interest rates in the near term, limiting risks for the banking industry.

Concerns and Caution:

  • Echoes concerns raised by RBI Governor Shaktikanta Das about the risk of very high growth in personal loans.
  • Flags the rapid growth of unsecured personal loans, cautioning about potential incremental non-performing loans (NPLs).

Loan Growth and Economic Factors:

  • Anticipates loan growth in line with nominal GDP, with retail loan growth exceeding corporate loan growth.
  • Notes that corporate borrowing is gaining momentum, but the uncertain environment may delay capital expenditure-related growth.

Funding Profiles and Return on Assets:

  • Expects banks’ funding profiles to remain sound, supported by a strong deposit franchise.
  • Despite potential challenges, deems the system’s return on average assets adequate.

Challenges for Public Sector Banks:

  • Public sector banks may face challenges due to a relatively high volume of weak assets, leading to higher credit losses.

Mixed Outlook for Finance Companies:

  • Foresees a mixed performance for finance companies (fincos), with weaker asset quality compared to major private sector banks.

The S&P Global report provides insights into the outlook for India’s banking sector, emphasizing improvements and potential challenges in the coming years.

About Net Interest Margin (NIM)

Net Interest Margin (NIM) is a key financial metric used in the banking industry to measure the profitability of a bank’s core lending and investment activities.

It represents the difference between the interest income earned by a bank and the interest expenses it incurs relative to its interest-earning assets.

  1. Net Interest Income (NII):
    • Net Interest Income is the difference between a bank’s interest income and its interest expenses. It is a measure of how much money a bank earns from its core lending and investment activities after accounting for the cost of funds.
  2. Average Earning Assets:
    • Average Earning Assets represent the average value of a bank’s interest-earning assets over a specific period. These assets include loans, securities, and other investments that generate interest income for the bank.
  3. Calculation Basis:
    • The numerator (Net Interest Income) represents the earnings from interest-related activities, while the denominator (Average Earning Assets) adjusts this income for the average level of interest-earning assets deployed by the bank. The resulting ratio is expressed as a percentage.
  4. Significance:
    • NIM is a critical metric for assessing a bank’s ability to generate profits from its core banking operations. A higher NIM indicates that a bank is earning more from its interest-related activities relative to the size of its earning assets.
  5. Margin Spread:
    • NIM is often referred to as the “margin spread” or simply the “margin” because it measures the spread or difference between the interest income and interest expenses.
  6. Factors Influencing NIM:
    • NIM can be influenced by various factors, including interest rates, the bank’s lending and investment strategies, the cost of funds, and the economic environment. Changes in interest rates, for example, can impact the profitability of a bank’s interest-related activities.
  7. Industry Benchmark:
    • NIM is closely monitored by investors, analysts, and regulators as an indicator of a bank’s financial health and efficiency. It is often compared to industry benchmarks and used in financial analysis to evaluate a bank’s performance relative to its peers.

Understanding Non-Performing Assets (NPAs):

  1. Definition:
    • NPAs are assets of a bank that are not generating income.
    • Specifically, loans or leases failing to meet stated principal and interest payments.
  2. Risk to Banks:
    • Loans on a bank’s balance sheet are listed as assets.
    • Non-payment by customers poses the risk of declining asset values.
  3. Criteria for Classification:
    • Loans have a grace period before being marked overdue.
    • NPAs typically include commercial loans over 90 days overdue and consumer loans over 180 days overdue.
    • Agricultural loans are classified as NPAs if interest/principal remains overdue for two harvest seasons.
  4. Categories of NPAs:
    • Sub-standard (aged <= 12 months).
    • Doubtful (aged > 12 months).
    • Loss assets (identified as loss but not written off).

Prevention and Solutions:

  1. Legal Mechanisms:
    • Utilize Acts like SARFAESI Act (2002) and Recovery of Debts Due to Banks and Financial Institutions Act (1993) for legal recovery.
    • Debt Recovery Tribunals (DRTs) and Lok Adalats expedite recovery through legal means.

National Asset Reconstruction Company Ltd. (NARCL):

  1. Introduction:
    • NARCL, established to address bad loans, will acquire the first set of NPAs exceeding ₹500 crore from banks.
    • Proposed in the Budget for 2021-22, it aims to create a bad bank structure housing an Asset Reconstruction Company (ARC) and an Asset Management Company (AMC).
  2. Ownership and Collaboration:
    • Collaboration between public and private sector banks.
    • Majority ownership by state-owned banks.
    • Assistance from India Debt Resolution Company Ltd (IDRCL), primarily owned by private banks, in the resolution process.
  3. Differentiation from Existing ARCs:
    • Public sector character with government backing.
    • Capacity to purchase significant accounts, freeing banks from holding these on their books.
  4. Asset Reconstruction Company (ARC):
    • Specialized financial institution acquiring NPAs from banks for balance sheet cleanup.
    • Registered under RBI.
    • Legal basis provided by the SARFAESI Act, 2002.
  5. Legal Basis (SARFAESI Act, 2002):
    • SARFAESI Act enables the establishment of ARCs in India.
  6. Capital Requirements for ARCs:
    • Amendment in 2016 set a minimum net-owned fund of Rs. 2 crores.
    • Subsequent increase to Rs. 100 crores in 2017.
    • Capital adequacy ratio requirement of 15% of risk-weighted assets.
  7. Need for Bad Bank Model:
    • Addressing total stress in the banking system exceeding Rs 15 lakh crore.
    • Banks, strained with stressed assets and limited capital, face challenges in managing NPAs.
    • The bad bank model aims to assist both the government and banks in dealing with the NPA burden.

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002:

  1. Purpose:
    • Allows banks and financial institutions to auction properties (residential and commercial) when borrowers default on loan repayments.
  2. Objective:
    • Aims to empower banks to take measures for the recovery or reconstruction of loans, reducing non-performing assets (NPAs).
  3. Applicability:
    • Effective primarily against secured loans where banks can enforce the security held against the loan.

Asset Reconstruction Companies (ARCs) and Securitization Companies (SCs):

  • Promotes the establishment of ARCs and SCs to handle the NPAs accumulated by banks and financial institutions.
  • These specialized entities play a crucial role in acquiring and managing distressed assets, contributing to the cleanup of banks’ balance sheets.

Legal Foundation:

  • SARFAESI Act, enacted in 2002, provides the legal basis for these measures to strengthen the financial system and address the issue of bad loans

About S&P Global Inc.:

  1. Nature of Business:
    • S&P Global Inc. is an American publicly traded corporation.
  2. Headquarters:
    • The company is headquartered in Manhattan, New York City.
  3. Primary Business Areas:
    • S&P Global Inc. primarily operates in the fields of financial information and analytics.

14. As RuPay on UPI faces some roadblocks, NPCI explores corrective options

Subject :Economy

Section: Monetary policy 

The National Payments Corporation of India (NPCI) is working on strategies to promote payments through RuPay credit cards linked to UPI (Unified Payments Interface). This initiative aims to boost the acceptance of RuPay credit cards on the UPI platform.

However, there have been challenges due to the difficulty in distinguishing between card-on-UPI transactions and regular UPI transactions made via QR codes.

Here are some key points related to this development:

  1. Background:
    • The government introduced UPI payments via RuPay credit cards to enhance acceptance infrastructure for such cards. This move was aimed at increasing the use of RuPay credit cards, but it faced challenges in terms of merchant acceptance.
  2. Challenges:
    • Merchants and banks find it challenging to differentiate between card-on-UPI transactions and regular UPI transactions. Merchants are accustomed to a zero Merchant Discount Rate (MDR) for UPI transactions, but when a credit card is used, they receive less money.
  3. MDR Concerns:
    • UPI transactions are generally free, but when made via linked credit cards, they attract the same interchange and MDR as any other credit card transaction. Some believe that the effective MDR on card UPI transactions is higher than card point-of-sale (POS) transactions.
  4. Classification Mechanism:
    • NPCI has implemented a mechanism that, once integrated by payment gateways and intermediaries, enables merchants and banks to identify and classify the two types of transactions (card-on-UPI and regular UPI). This allows for a proper assessment of charges.
  5. Incentive Model:
    • To encourage increased adoption and address the higher charges on RuPay UPI transactions, NPCI is exploring a fee income-based incentive model. Payment gateways may compensate merchants for the higher charges compared to the zero charge on regular UPI transactions.

About Merchant Discount Rate

MDR stands for “Merchant Discount Rate.” It is a fee charged from a merchant by a bank for accepting payments from customers through credit and debit cards.

MDR is a crucial component of the payment processing ecosystem and is typically borne by the merchant. The rate is a percentage of the transaction amount, and it is deducted by the acquiring bank before transferring the funds to the merchant.

  1. Customer Makes a Card Payment:
    • When a customer makes a payment using a credit or debit card at a merchant’s point of sale (POS) terminal or through an online platform, the transaction involves various parties, including the cardholder, the merchant, and the banks.
  2. Processing the Transaction:
    • The payment information is processed through the payment network, and the transaction is authorized by the cardholder’s bank (issuing bank).
  3. Transfer of Funds:
    • After authorization, the funds are transferred from the cardholder’s account to the merchant’s account. However, before reaching the merchant, the acquiring bank deducts the MDR.
  4. MDR Deduction:
    • The MDR is a small percentage of the transaction amount, and it serves as compensation for the services provided by the banks and payment service providers in facilitating electronic transactions. The acquiring bank, which provides the merchant with the necessary infrastructure to accept card payments, collects the MDR.
  5. Distribution of Funds:
    • The remaining amount after deducting the MDR is credited to the merchant’s account. The MDR covers various costs, including interchange fees (paid to the card-issuing bank), network fees, and operational costs associated with maintaining the payment infrastructure.

Unified Payments Interface (UPI):

Unified Payments Interface (UPI) is an instant real-time payment system that enables users to transfer money on a real-time basis across multiple bank accounts without disclosing their bank details to the recipient.

It is one of the major systems operated by the National Payments Corporation of India (NPCI) and is widely used for digital transactions.

Key Points:

  1. Real-Time Transactions: UPI facilitates immediate fund transfers between individuals and businesses, providing a seamless and quick payment experience.
  2. NPCI Systems: UPI is a part of the NPCI-operated systems, which include National Automated Clearing House (NACH), Immediate Payment Service (IMPS), Aadhaar-enabled Payment System (AePS), Bharat Bill Payment System (BBPS), RuPay, and others.
  3. Prominent UPI Apps: Leading UPI apps include PhonePe, Paytm, Google Pay, Amazon Pay, and BHIM. BHIM is the government’s offering in the UPI ecosystem.

BHIM (Bharat Interface for Money):

BHIM (Bharat Interface for Money) is a digital payment application developed by the National Payments Corporation of India (NPCI).

It operates through the UPI system, consolidating multiple bank accounts into a single mobile application for real-time fund transfers.

Key Features:

  1. Real-Time Fund Transfer: BHIM allows users to conduct real-time fund transfers between bank accounts.
  2. Launch Date: The app was launched in December 2016, contributing to the government’s push for digital payments.
  3. Authentication Levels:
    • Device Binding: The app is linked to a device’s ID and mobile number.
    • Bank Account Sync: Users need to sync their bank accounts (both UPI and non-UPI enabled) to initiate transactions.
    • PIN Authentication: Users set up a PIN for app login, and a UPI PIN associated with their bank account is required to complete transactions.

About NPCI:

  1. Formation: The National Payments Corporation of India (NPCI) was incorporated in 2008 as a “Not for Profit” company under the Companies Act 1956 (now Section 8 of the Companies Act 2013).
  2. Initiative:NPCI is an initiative of the RBI and IBA, established under the provisions of the Payment and Settlement Systems Act, 2007. It aims to create infrastructure for the entire banking system in India, covering both physical and electronic payment and settlement systems.

Key functions and initiatives of NPCI include:

  1. Unified Payments Interface (UPI): NPCI developed and manages the UPI, which is a real-time payments system that enables users to link multiple bank accounts to a single mobile application. It facilitates the seamless routing of funds across various bank accounts.
  2. Immediate Payment Service (IMPS): NPCI launched IMPS, a real-time interbank electronic funds transfer system in India. It allows customers to transfer funds instantly between banks through mobile phones or internet banking.
  3. National Financial Switch (NFS): NFS is a centralized network that connects various banks and financial institutions for routing ATM transactions. NPCI operates and manages the NFS to ensure secure and efficient ATM transactions.
  4. RuPay Card: NPCI introduced RuPay, a domestic card payment network in India. RuPay cards are an alternative to international card schemes and are widely used for various transactions.
  5. BHIM (Bharat Interface for Money): NPCI developed the BHIM app, a UPI-based mobile payment application that allows users to send and receive money using their smartphones.
  6. Aadhaar Enabled Payment System (AePS): NPCI launched AePS, which allows users to make financial transactions at micro-ATMs using their Aadhaar number and fingerprint authentication.
  7. National Automated Clearing House (NACH): NPCI manages the NACH platform, which facilitates electronic clearing of payments for various financial transactions, including salaries, pensions, and dividends.

About National Common Mobility Card (NCMC)

The National Common Mobility Card (NCMC) is an inter-operable transport card system introduced in India, often referred to as ‘One Nation One Card.’

Key Features:

  1. Inter-Operability: The NCMC is designed to be an inter-operable transport card, allowing users to pay for various modes of transportation seamlessly. It covers services such as buses, metro, suburban railways, toll taxes, and parking charges.
  2. Multi-Purpose Usage: Apart from transportation services, the NCMC can also be used for retail shopping and cash withdrawals. It aims to serve as a versatile card for different financial transactions.
  3. Automatic Fare Collection System: NCMC operates as an automatic fare collection system, eliminating the need for separate cards for different modes of transport. It streamlines the payment process for commuters.
  4. RuPay Card Integration: The card runs on the RuPay payment network, which is a domestic card scheme in India. RuPay ensures that the card is accepted widely across various payment channels.
  5. Stored Value: The card holds a stored value that supports offline transactions, providing flexibility to users. It reduces dependency on continuous network connectivity for transaction processing.

Nandan Nilekani Committee: The idea of the NCMC was recommended by the Nandan Nilekani committee, which was set up by the Reserve Bank of India. The committee focused on enhancing digital payment systems and reducing the reliance on cash.

Digital Personal Data Protection Act 2023 (DPDP)

  1. Legislation Overview:
    • DPDP is India’s flagship personal data protection legislation.
    • Comparable to the impact of GDPR in 2016, DPDP is expected to significantly influence data protection practices in India.
  2. Corporate Evaluation:
    • Corporates with EU headquarters and subsidiaries in India must assess compliance with DPDP.
  3. Data Categories:
    • DPDP lacks a distinct category for sensitive personal data, treating all data with the same security measures.
    • Unlike GDPR and SPDI Rules, DPDP doesn’t distinguish between personal and sensitive personal data.
  4. Processor’s Role and Penalties:
    • DPDP holds only the data fiduciary liable to the regulator.
    • Data processors’ liability is governed by contractual agreements, placing a higher burden on data fiduciaries.
  5. Data Transfer:
    • Cross-border data transfer under DPDP is generally permitted, with restrictions on transfers to specific countries or sectors.
    • Evaluation of sectoral laws impacting business is necessary for data transfer compliance.
  6. Child Data:
    • DPDP defines a child as an individual below 18 years, imposing stringent compliance.
    • Prohibits behavioral monitoring/targeted advertising for child data and mandates verifiable parental consent.
  7. Penalties:
    • GDPR prescribes penalty slabs based on breach nature.
    • DPDP sets maximum penalty amounts, subject to factors like breach severity and mitigative actions.
  8. Implications for Businesses:
    • DPDP, when implemented, will bring substantial changes to privacy practices in Indian businesses.
    • Entities GDPR-compliant need to adapt policies, processes, and systems for DPDP compliance.
  9. Conclusion:
    • The differences between GDPR and DPDP necessitate a thorough evaluation of policies and practices for entities operating in India.

15. Digital Personal Data Protection Act 2023 (DPDP)

Subject : Polity

Section: Legislation in news

The DPDP Act is India’s comprehensive legislation for personal data protection. Enacted in 2023, it regulates the processing of personal data and establishes the rights of individuals over their data.

Key features include:

  1. Scope:
    • Applies to organizations processing personal data of individuals in India.
    • Applicable to entities both within and outside India, if they process data of individuals in India.
  2. Consent:
    • Allows data processing without explicit consent in specific cases, such as contractual obligations or public interest.
    • Emphasizes the right to be forgotten and the right to erasure.
  3. Data Localization:
    • Does not mandate the storage of personal data within India.
    • Provides for the cross-border transfer of data, subject to certain conditions.
  4. Data Breaches:
    • Requires organizations to notify the Data Protection Board and affected individuals within 72 hours of becoming aware of a data breach.
    • Establishes obligations for data fiduciaries to implement security safeguards.
  5. Penalties:
    • Imposes fines up to INR 250 crores for violations.
    • Includes penalties for failure to conduct a data impact assessment or follow breach notification procedures.

General Data Protection Regulation (GDPR):

GDPR is the European Union’s data protection regulation implemented in 2018.

It sets out rules for the processing of personal data and the rights of individuals.

Key aspects include:

  1. Scope:
    • Applies to organizations processing personal data of individuals in the European Union.
    • Extraterritorial application, impacting organizations worldwide.
  2. Consent:
    • Requires explicit consent for processing personal data.
    • Individuals have the right to withdraw consent.
  3. Data Localization:
    • Generally, requires the storage of personal data within the EU.
    • Permits data transfers based on adequacy decisions, binding corporate rules, or standard contractual clauses.
  4. Data Breaches:
    • Mandates notifying the relevant data protection authority within 72 hours of a data breach.
    • Emphasizes the principles of data protection by design and by default.
  5. Penalties:
    • Imposes fines up to €20 million or 4% of the global annual turnover for serious violations.
    • Focuses on accountability, transparency, and data protection impact assessments.

Both DPDP and GDPR aim to safeguard individuals’ privacy but differ in certain approaches, such as consent requirements, data localization, and penalty structures.

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