9 PM Daily Current Affairs Brief – March 18th, 2023

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Mains Oriented Articles

GS PAPER - 2

The US is clear that Arunachal Pradesh is a part of India. Why doesn’t it take a stand on Aksai Chin?

Source– The post is based on the article “The US is clear that Arunachal Pradesh is a part of India. Why doesn’t it take a stand on Aksai Chin?” published in “The Indian Express” on 18th March 2023.

Syllabus: GS2- Bilateral groupings

Relevance– Border dispute between India and China

News– Recently, a Democratic Senator introduced a resolution in the US Senate on February 16 reaffirming the state of Arunachal Pradesh as Indian territory and condemning China’s provocations in South Asia.

What are the important points contained in resolution?

The latest Resolution also covers recent military provocations and aggressions by the PLA on LAC. It mentions the Chinese villages constructed along the border areas of Arunachal Pradesh.

It also underlines China’s questionable narrative on the visits by the Dalai Lama and other leaders to Arunachal Pradesh and China’s refusal to grant residents of the Indian state visas for travel to China.

It accuses China of impeding poverty alleviation and economic development in Arunachal Pradesh as its behaviour compels many international donors to be cautious of helping.

What is the position of the US on the boundary dispute between India and China?

The US position on Arunachal Pradesh has been helpful since 1962. The United States at that time announced that it recognised the McMahon Line as the traditional and generally accepted international border and fully supported India’s position in that regard.

The US was of the view that China by military action had taken territory belonging to India. Its policy was that any settlement must be accepted by India with honour.

The US felt this Chinese aggression provided an unprecedented opportunity to win over India to its side.

Official US maps depict Arunachal Pradesh as an integral part of India. At the same time, Washington’s position on the India-China boundary issue is far from perfect.

The US Department of State’s international travel advisory maps clearly show Aksai Chin and some other parts of the western sector as disputed.

The US has an ambiguous stand even today on the boundary dispute in Ladakh. It limits the possibility of ground-level cooperation between India and the US in the western sector.

The US position of neutrality on the India-China boundary dispute over Aksai Chin contradicts its supportive position on the McMahon Line in Arunachal Pradesh.

What are some facts about the India and China boundary dispute?

China is in illegal occupation of 38,000 sq km of Indian territory in Ladakh and has usurped a further 5,180 sq km of Indian territory in Pakistan-Occupied Kashmir.

China Qing dynasty presence in Tibet began to emerge around 1720, following intervention in the internecine succession struggle after the death of the Sixth Dalai Lama (1683-1706).

There is no basis to the Chinese claim over Tawang on the flimsy grounds that it is the birthplace of the Sixth Dalai Lama.

Endless delay: On the conduct of Governors and legislative agenda

Source: The post is based on the article “Endless delay: On the conduct of Governors and legislative agenda” published in The Hindu on 18th March 2023.

Syllabus: GS – 2: Structure, organization and functioning of the Executive and the Judiciary

Relevance: Tussle between state government and Governors

News: The Supreme court is set to hear a petition from the Telangana Government seeking directions to the Governor to grant assent to the Bills.

What are the Constitutional Provisions regarding giving assent to the bills?

The Governor can either grant assent to a Bill or decline it or reserve it for the President’s consideration. In suitable cases, it may also be returned for reconsideration.

However, none of this should be based on the Governor’s personal view on the Bill’s content. Governors should only act as per the powers granted by the Constitution.

Read More: Issues Related to the Office of Governor – Explained

What are areas of conflict between the state governments and the Governors?

In Punjab, the Governor delayed summoning the Assembly. The issue was later settled up by the Supreme Court.

Read More: State Of Head Governors have been seen as partisan for decades. They should be accountable to Centre, state & Rajya Sabha

What can be the way ahead?

Constitutional functions should not be held hostage to political and personal differences.

The Supreme Court’s recent statement that communication amongst constitutional authorities shouldn’t turn into a “race to the bottom” is noteworthy.

GS PAPER - 3

Safe Internet: Tech Plus Citizens – Union Home Minister argues GoI’s modern cybersecurity setup will protect the fast-growing digital economy

Source: The post is based on the article “Safe Internet: Tech Plus Citizens – Union Home Minister argues GoI’s modern cybersecurity setup will protect the fast-growing digital economy” published in The Times of India on 18th March 2023.

Syllabus: GS – 3: Basics of cyber security.

Relevance: About protecting India’s cyberspace.

News: The increased use of digital platforms has increased serious risks to cybersecurity.

About India’s digital potential

India has 65 crore internet users, and 114 crore mobile users. India’s broadband infrastructure reaches more than 6 lakh villages, and the number of digital transactions of more than Rs 9,000 crore.

Why cyber security is a matter of national security?

Prime Minister has recently stated that “Cybersecurity is no longer limited to the digital world. It has become a matter of national security”. This is because of a) the borderless nature of cyberspace, b) the sophistication of the methods and tools of cyber criminals, c) the constant evolution of cyberattacks.

How India is developing its digital ecosystem?

In 2015 the government introduced Digital India as an umbrella concept to create ‘digital infrastructure as a fundamental service’ for every citizen.

India has developed a strong digital ecosystem for procurements, transfer of welfare benefits, and financial inclusion.

India is also working on the Internet of Things to ensure compassion and sensitivity in the use of technology.

In short, India’s digital push laid the groundwork for Amrit Kaal – India’s ambition for a $5 trillion economy and to be a developed country by 2047.

What are the initiatives for protecting India’s cyberspace?

Cybersecurity is a collective responsibility of both the Union and state governments.

To ensure the safe use of the digital ecosystem and combat cybercrime, the ministry of home affairs has taken several significant steps.

Crime and Criminal Tracking Network and Systems (CCTNS): CCTNS has now been integrated into all 16,447 police stations in the country. In 99. 9% of police stations, 100% of FIRs are registered immediately in the CCTNS.

CERT-In (Indian Computer Emergency Response Team)

Interoperable Criminal Justice System (ICJS): has been initiated to expedite justice by exchanging data across courts, police, prosecution, prisons, and forensic labs. Recently, the government approved Phase II of ICJS. This phase is based on the principle of ‘one data, one entry’ and would be made available through a dedicated and secure cloud-based infrastructure with high-speed connectivity.

Indian Cyber Crime Coordination Centre (I4C): Under this, seven platforms operate, such as a reporting portal, a cyber threat analytical unit, a cybercrime investigation task force and a research centre, work in coordination with each other. So far, more than 20 lakh cybercrime complaints have been registered on the portal, with 40,000 converted into FIRs. Fifteen crore people have used this portal.

A massive open online courses’ platform (MOOCs) called the ‘CyTrain’ portal has been developed under I4C.

Fingerprint data system ‘NAFIS’: It has been launched with a storage capacity of 300 crore fingerprint data along with a ‘1930’ helpline. More than 250 banks and financial intermediaries are onboarded on this platform, which helps in real-time actions like blocking and lien marking of defrauded money. he quick reporting system and action by the task force resulted in the recovery of over Rs 235 crore embezzled by cybercriminals from over 1. 33 lakh citizens so far.

Investigation Tracking System for Sexual Offences (ITSSO) portal: It was launched in 2019 for real-time monitoring and management of cases of sexual assault and cases under POCSO.

Safe City project: It aims to create a safe, secure, and empowering environment for women in public places and has been introduced in eight selected cities.

Other initiatives: a) MHA is also working to promote cyber sanitation and hygiene to safeguard the most vulnerable, b) Grant-in-aid of about Rs 100 crore has been provided to states/UTs to set up forensic-training laboratories for the cyberworld.

Read more: Cyber attacks and Cyber Security in India – Explained Pointwise

What should be done for protecting India’s cyberspace?

India has to fulfill its commitment towards the twin objectives of ‘using technology with sensitivity’ and ‘ensuring public safety and security. Citizens should have to build awareness and alertness to ensure online safety and security.

World’s Fed Up US – central bank is caught napping, again

Source: The post is based on the article “World’s Fed Up US – central bank is caught napping, again” published in The Times of India on 18th March 2023.

Syllabus: GS – 3: Effects of liberalization on the economy.

Relevance: About US Fed policy and bank failures.

News: Recently the focus of financial markets has shifted from central banks increasing interest rates to commercial banks collapsing. Three US banks have collapsed and a fourth has received an injection of $30 billion from a consortium of banks. In Europe, Credit Suisse had to borrow $54 billion from the Swiss central bank.

About the US Fed policy post-2008

Following the 2008 global financial crisis, the US Fed unleashed waves of liquidity through a process known as quantitative easing (QE) to deal with the crisis of its own financial intermediaries. Fed’s quantitative easing (QE) had spillover effects on emerging markets like India. For example, the ‘taper tantrum’ of 2013 caused outflow of capital and Forex depletion.

Post-Covid, US Fed unleashed a loose monetary policy, then reversed course. The Fed embarked on a most aggressive policy of interest rate hikes. This led to predictable financial instability.

How US Fed policy has led to bank failures at present?

The Fed’s supervisory regime didn’t have a plan for banks likely to struggle in the wake of a fast-paced monetary tightening. So, that financial instability has spilt over to both the real economy and other countries.

Read more: Silicon Valley Bank crisis: Reasons and Impacts - Explained, pointwise

To avoid such failures in future, the US Fed needs to get its supervisory act together.

The forecast after a fake news campaign in Tamil Nadu

Source– The post is based on the article “The forecast after a fake news campaign in Tamil Nadu” published in “The Hindu” on 18th March 2023.

Syllabus: GS3 – Internal security Issues associated with fake news

Relevance– Issues related to freedom of speech

News– Recently, a malicious online disinformation campaign that migrant workers from Bihar are facing violence, led to law-and-order issues in Tamil Nadu.

What are the efforts by various countries to tackle disinformation?

The European Union has put out the Code of Practice on Disinformation 2022. The Code includes transparency in political advertising, empowerment of fact checkers and researchers, tools to flag disinformation, and measures to reduce manipulative behaviour.

The United Kingdom has proposed enacting an Online Safety Bill. It expects social media platforms to actively monitor problematic content.

What are steps taken by the government to tackle disinformation?

Section 69A of the Information Technology Act, 2000 is an important tool in the hands of the government. It gives power to the Union Government to block access to any information online that it considers necessary in the interest of the sovereignty and the integrity of India, the security of the state or public order.

The Union brought out the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 to regulate content by online publishers of news and social media intermediaries.

The recent draft amendments to the IT Rules, 2021 empower the Press Information Bureau to flag inaccurate and fake news related to government bodies on social media platforms.

What are issues with government measures to tackle disinformation in India?

There has been little or no serious discussion on the menace and the extent of disinformation in India.

The government in India has only employed knee jerk measures such as Internet shutdowns without following the doctrine of proportionality. This response is over simplistic, non­transparent and autocratic.

The government has not introduced a robust framework to tackle the root causes of disinformation. Rather, the Union has granted itself greater powers to strike down any content that is not pleasant for the government.

The focus has been more on containing criticism against the Union Government and its leaders, instead of blocking fake news.

What is the way forward to tackle disinformation in India?

A more studied, comprehensive and calculated set of legislative actions is required. The objective should be to balance between free speech under Article 19 of the Constitution of India, and protecting citizens from malicious disinformation.

In Tehseen S. Poonawalla vs Union Of Indian case of 2018, the Supreme Court of India had

held that it is the duty of the Union and State governments to take steps to curb dissemination.

Our designation of national monuments must be freed from the ‘slave’ mindset

Source– The post is based on the article “Our designation of national monuments must be freed from the ‘slave’ mindset” published in “The Indian Express” on 18th March 2023.

Syllabus: GS3- Indian culture

Relevance–  Preservation and management of historical monuments

News– Some historical monuments of great importance have not been given sufficient recognition by concerned government agencies.

How are steps taken by the current government contributing for preservation and management of monuments?

The current government has increased focus on decolonisation drive. It has brought out the achievements of King Suheldev, Rani Durgavati and Lachit Barphukan.

It has highlighted the story of the founder-king of Delhi, Anangpal Tomar and declared the neglected Anang Tal as a monument of national importance.

It held national and international events at the Sindhu-Saraswati site of Dholavira. A new Shivaji-era inspired naval insignia was unveiled.

What shows that some historical monuments of great significance have not given sufficient attention?

The samadhi in Satara of Maratha queen Tarabai Bhonsle, who fought the Mughals is in ruins.

There is not a single monument connected with the struggles of Dalits and B R Ambedkar’s life that has been declared as a national monument.

The birthplace of Adi Sankara, Kalady has not been declared a monument of national importance despite recommendations by the Governor of Kerala.

The Mangarh hillock in Rajasthan was recommended by the NMA, along with the Minister of State for Culture, to be declared a Monument of National Importance. This was the site of the massacre of more than 1,500 Bhils by the British army on November 17, 1913. No action has been taken.

There are more than a hundred monuments, like Tota-Maina ki Qabar and Dadi Poti ka Gumbad, which have absolutely no history. But, they are declared as Monuments of National Importance.

Not a single monument of national importance from Kashmir has been recommended to be declared as a UNESCO World Heritage Site. There exists many important monuments like  Martand Sun Temple, Parihaspora and Harwan Monastery.

What is the way forward for management and recognition of historical monuments?

There is a need for a relook at the functioning and mandates of all the agencies working on monuments. They should be freed from the British slave mindset.

India needs an Archaeological Foundation to preserve its civilisational and revolutionary monuments of India. The monuments may be given a district-level archaeological tag.

The report by the Economic Advisory Council to the Prime Minister on Monuments of National Importance should be considered. It is authored by chairman Bibek Debroy and member Sanjeev Sanyal.

Demolitions of homeless shelters in Delhi show a lack of compassion, and a disrespect for the Court

Source– The post is based on the article “Demolitions of homeless shelters in Delhi show a lack of compassion, and a disrespect for the Court” published in “The Indian Express” on 18th March 2023.

Syllabus: GS3- Vulnerable sections of the population. GS1- poverty and developmental issues

Relevance–  Issues related to homeless and destitute people

News– Recently, the officials of the Delhi government arrived without warning with bulldozers and pulled down the shelters for the homeless.

Why is demolishing the shelters for the homeless not a right action?

The official claimed that these shelters were unlawful encroachments. But they had been created by the orders of India’s highest court.

In the Right to Food case, the Supreme Court ruled that every person, including houseless destitute persons, had a fundamental right to life. It was the state’s constitutional duty to ensure decent shelters for all homeless people.

Studies revealed that there were at least six times more chances of dying if you were unhoused as compared to people with roofs over their heads.

What are the reasons behind the poor treatment of destitute and homeless people by the state?

There exist official prejudices against homeless people. It stereotypes homeless people as criminal, drug-abusing parasites dangerous to law-abiding residents of the city. Such criticism neglects their critical role in the city’s economy – as casual construction workers, in eateries, at wedding parties, and as head-loaders, all at dirt wages.

The homeless shelters were demolished to beautify the national capital for heads of G20 countries who will assemble in Delhi later this year. The Indian state, who wants to boost its global profile, considers these shelters as embarrassing sightings for its image.

It shows the absence of elementary public compassion. The state has little care for its poorest citizens and their dispensable lives. But the state can do this because middle-class and wealthy Indians will applaud its resolve to beautify.

Conglomerates & brandless growth

Source: The post is based on the article “Conglomerates & brandless growth” published in Business Standard on 18th March 2023.

Syllabus: GS 3 – Economy

Relevance: Issues with Indian Conglomerates

News: The article discusses the problem with Indian conglomerates.

Which companies in India are conglomerates and what are the common things amongst them?

Companies such as Adani, Ambani, Tata, Birla, and Vedanta are conglomerates in India, i.e., they are large corporations.

Things which are common amongst them are – a) they are all legacy or family-controlled enterprises, b) these have most of their businesses in areas which are highly regulated by the government, c) none of them owns a truly global Indian brand.

Since these conglomerates work in areas which are highly regulated by the government, the allegation of cronyism is often put forward by the opposition.

What are the arguments against cronyism?

Areas such as ports, airports, require both government as well as private players to work together for the development.

Further, it is important for the government to work closely with powerful Indian conglomerates to compete with others across the world, especially to counter China’s Belt and Road Initiative in the nation’s interest.

Hence, the issue of cronyism or to say the government is supporting just one enterprise (Adani) is baseless. However, the government must provide a level playing field for all in these sectors rather than cooperating with a few.

Read More: Billionaire Raj: The rise of India’s multi-business conglomerates

What are the concerns with these conglomerates?

These conglomerates have not been able to build a global Indian brand. Global brands can be classified into three categories: Country, company and product brands.

In the first category, India has Yoga, ayurveda, etc. that has built the brand of India globally. In the second category, we have powerful Indian company brands known across the world like Tata, Reliance, etc.

However, the list in the third category is empty because none of these companies have been able to build a product brand that rules the world.

India does not have a purely homemade car, a two-wheeler, a software or operating system. Even though there are GI tags for most of the agri products, none of those acts as a brand that represents India globally.

Almost all the garments produced in our factories and exported are sold under the labels of international store chains. Although India is making a lot of mobile phones for export but none of these carry an Indian brand name.

The government has pushed for domestic manufacturing, but it is pushing it in the same direction as our software industry, i.e., outsourcing.

What can be the way ahead?

The success of Indian conglomerates not only lies in improving the domestic economy but also in making a brand that is recognised globally and represents India.

Therefore, there is a need to look in that direction by holding necessary discussions with the stakeholders.

[Yojana March 2023 Summary] Banking: focus on new responsibilities and good governance – Explained, pointwise

For 7PM Editorial Archives click HERE

Introduction

Banks have been traditionally known for accepting deposits and giving loans. However, the definition of a bank has expanded beyond just a physical building. Today, the banking system has evolved into a secure and robust medium that offers innovative deposit schemes, secure money storage, and quick loan transactions.

Banks are no longer just a conglomerate of traditional banks but have also incorporated new forms of banks such as payment banks, small finance banks, and even the general banking system of post offices and non-banking financial companies.  

Banking provisions in the budget

Banking provisions in budgets
Source: PIB

Discussions about the banking provisions in budgets have broadened to include topics like tax concessions, capital provisions, and the role of these new forms of banks in the financial system. The General Budget 2023-24 for the banking sector can be analysed by dividing it into five parts: 

  • New savings schemes and changes in existing savings schemes 
  • Sources of Government Borrowing 
  • Campaign to promote digital transactions 
  • Loan for a specific sector 
  • Reforms in banking governance 

Banking provisions in the budget: Deposit Schemes

The Budget 2023-24 includes measures to promote savings among women and secure the future of the elderly through savings.  

Mahila Samman Savings Certificate: It is a new small savings scheme, which will be available until March 2025. This scheme will offer a deposit facility of up to Rs 2 lakh for women or girls for two years at a fixed interest rate of 7.5 percent with a partial withdrawal option. This is aimed at encouraging economic empowerment of half the population and providing them with a secure medium to save their money.

Read more: Women get a one-time small savings scheme 

Sukanya Samriddhi Yojana: It is a special scheme for girls launched in 2015, under the ‘Beti Bachao Beti Padhao’ initiative. Its aim is to encourage families to invest in their education and save for marriage expenses. Parents of girls under 10 years can open up to two (three in case of first girl child twins) Sukanya Samriddhi accounts with a maximum deposit of Rs 1.5 lakh annually. The scheme is EEE (Exempt-Exempt Exempt, i.e. tax exemption at the time of investment, tax exemption on the increase in investment, and tax exemption at the time of withdrawing the entire amount of investment including interest). 

Senior Citizen Savings Scheme: Under this, the maximum deposit limit for this scheme has been increased from Rs 15 lakh to Rs 30 lakh. The interest rates of the scheme are reviewed quarterly. 

Monthly Income Account Scheme: The maximum deposit limit for this scheme has been increased from Rs 4.5 lakh to Rs 9 lakh for a single account and from Rs 9 lakh to Rs 15 lakh for a joint account. The interest rates of the scheme are also reviewed quarterly. 

Note: While the announcement regarding the savings schemes in the budget is beneficial for the common people, it will also be helpful for the government. To bridge the fiscal deficit the government has kept a target of raising more than Rs 4.71 lakh core through small savings schemes.

Banking provisions in the budget: Sources of government borrowing

The Union Budget 2023-24 estimates net market borrowing from dated securities at Rs 11.8 lakh crore against a fiscal deficit of Rs 17.87 lakh crore.

  • Banks play a crucial role in fulfilling this estimate as they invest a large amount of money in these bonds, aiming to meet statutory requirements and take advantage of market conditions. To actively participate in this system, banks must have sound financial conditions.  
  • Currently, all 12 public sector banks and major private banks are profitable, and their deposits are continuously increasing, making it easier for them to participate in the government’s borrowing. 
Read more: Union Budget 2023-24: Key Highlights – Explained, pointwise

Banking provisions in the budget: Promoting digital transactions

  • Banks are competing to provide fast, secure, and accessible digital transaction services.  
  • Incentive scheme: After the success of last year’s programme, which led to a 76% increase in digital transactions and a 91% increase in their value, the government has decided to keep offering incentives for the financial year 2023–2024. 
  • Under this scheme, approval has been granted for giving Rs 2600 crore to banks to promote Point-of-Sale (POS) and e-commerce transactions using RuPay Debit cards and low-value BHIM-UPI transactions.  
  • This provision will be beneficial for banks, which are striving to offer competitive digital payment solutions to their customers. 

Banking provisions in the budget: Sector-specific loans 

The banking sector keeps an eye on credit targets for different sectors. In fact, banks get some facilities with these targets such as the provision of a part of the interest rate by the government or the credit guarantee fund. It helps the banks to give their loans to a specific sector. 

Agricultural sector: 

  • The budget focuses on the agriculture sector and provides a provision of Rs 23,000 crores for small farmers to continue benefiting from the Kisan Credit Card.  
  • The agricultural loan target has been increased to Rs 20 lakh crore, with a focus on animal husbandry, dairy, and fisheries.
  • The government offers short-term crop loans up to Rs 3 lakh at a 4% effective interest rate if repaid on time, and for allied activities such as fisheries, animal husbandry, and dairy, loans up to Rs 2 lakh are available at the same interest rate.  
  • In addition, if the bank gives agricultural loans through its resources, then they get 2 percent assistance. 

Micro, Small and Medium Enterprises (MSME):  

  • The Credit Guarantee Scheme for MSMEs will be renewed with an additional Rs 9,000 crore, commencing from April 01, 2023. This will enable collateral-free loans of an additional Rs 2 lakh crore and bring down the cost of credit by about one percent.  
  • Due to the guarantee factor, banks will not have to worry much about the loss in case of loan default and it will be easier for small and medium businessmen to get loans. 

Banking provisions in the budget: Reforms in Banking Governance

  • The budget has proposed amendments to the Banking Regulation Act, Banking Companies Act, and Reserve Bank of India Act to reform the governance of banks and increase investor protection.  
  • Although the details are not disclosed, new guidelines are expected to be drawn for the bank’s board of directors, including eligibility, tenure, and reappointment. The aim is to improve the banking system, which has expanded in recent years. 

Conclusion

Based on the changes in the banking system, the approach for analyzing the general budget for the banking sector has also evolved. The budgets for the financial years 2022-23 and 2023-24 do not include any provisions for the recapitalization of public sector banks. The main reason for this is that the financial health of public sector banks has improved a lot, bad loans have come down, and the situation is likely to remain the same in the future.  

Source: Yojana

Syllabus: GS 3: Economic development – Government Budgeting.

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