Daily Current affairs 10 January 2019UPSC - Daily Current Affair
- The Reserve Bank of India (RBI) has granted permission for tokenizationof debit, credit, and prepaid card transactions in India.
- Generally, consumers save their debit or credit card details with any service provider, to make payments smooth, and easy.
- Often, this is a mandatory requirement as well.
- Users save their cards details with these service providers for future payments, and the payment is often done with a PIN or password or sometimes just the CVV number.
- However, in case any such service provider/website/app gets hacked, then users’ card details can be compromised, and data stolen.
- Moreover such safety is necessary as according to a study by Zion Market research, global mobile payments are expected to top $3.3 trillion by 2024, at a CAGR of 60% between 2018 and 2024.
- In this context, RBI has now allowed ‘Tokenisation’ of card payments, which will avoid such frauds/data theft.
- Tokenization is the process of providing unique alternate code, known as tokens in place of the actual card details.
- This token is used to perform card transactions in contactless mode at:
- Point of sale (POS) terminals
- Quick Response(QR) code payments
- Near Field Communication (NFC)/Magnetic Secure Transmission (MST)-based contactless transactions
- In-app payments, or
- Token storage mechanisms (cloud, secure element, trusted execution environment, etc.)
- The tokens generated are unique for every token requestor and card holder.
- The way the token will work is like this —
- The debit or credit card holder will create a code for a particular amount, say Rs. 500, through an app in the form of a number.
- That number will have the amount that can be spent, the merchant type where it can be spent as well as time within which the transaction needs to be completed.
- Then the number can be shared with the merchant who will enter it in the mobile, to get the payment for the items sold.
Highlights of the news
- Taking another step towards enhancing the safety and security of payment systems in the country, the Reserve Bank of India (RBI) has released guidelines on tokenisation for debit, credit, and prepaid card transactions.
- This directive has been issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
- RBI has allowed the various card types such as Visa, Mastercard, and othersto start providing tokens to the token requestors (third-party apps).
- RBI suggested that the process of tokenization or detokenization should take place via an authorized card network.
- While the actual card, token or other important details must be stored in secure mode, the PAN detailsshould not be stored by the token requestors.
- Additionally, the use of AFAor Additional Factor of Authentication will remain in place along with tokenized transactions for enhanced security.
- Furthermore, RBI has mandated that users will be provided with the ability to register or deregister themselves out of these services.
- Users will also be able to set transaction amount limit and number of transactions accordingly for each third-party payment service.
- It also instructed the card service networks to put in place a mechanism for periodic system checks and have at least one security audit of all third-party token service providers every year.
- This system audit shall be undertaken by empanelled auditors of Indian Computer Emergency Response Team (CERTIn) and all related instructions of Reserve Bank in respect of system audits shall also be adhered to.
- There will be no additional charges for the service to be levied by the consumer.
Significance of the move
- Safety of digital transactions
- This measure helps in avoiding the misuse of card details or network hacking.
- The allowance of tokenization will add an additional layer of safety and security while conducting transactions via cards.
- Hence, the tokenisation services will ensure the safety of digital transactions and reduce chances of fraud.
- Devaluing data
- It devalues data of consumers by replacing payment credentials with tokens as the tokens are of no use to the hackers.
- It is central to Mastercard’s goal of achieving secure and frictionless payment experience.
- Hence, tokenisation is expected to increase digital transactions in India, as due to safety and security more people will opt for digital payment.
- Global best practice
- It’s a global best practice and falls in compliance with guidelines such as Payment Card Industry Data Security Standard (PCIDSS).
- Mastercard’stokenisation service, Mastercard Digital Enablement Service (MDES) has been live in more than 50 over countries with over 1,500 banks enabled for tokenisation.
- MDES has been adopted in Asia Pacific region with more than 100 banks for various token requestors such as Samsung, Google, Apple, Fitbit, Garmin and several others.
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Section : Economics
- In a significant step towards curbing the spread of malaria and other mosquito-borne diseases, researchers from the United States have discovered a drug which could help in “mosquito birth control”.
- In an important discovery, researchers have found a safe way to control mosquito population without affecting other organisms.
- The drug discovered blocks a protein in mosquitoes due to which the eggs are laid with defective shells causing the embryos inside to die.
- The drug can be used in the form of sprays and would be absorbed by the mosquito through her legs and body.
- Thus the drug can prove effective in developing new bio-safe insecticides.
How does the drug work?
- The drug discovered targets a protein required for development of mosquito eggs.
- Since the protein is specific to mosquitoes, it may be possible to interrupt their egg formation without harming other insects.
- The researchers identified a protein, called eggshell organizing factor whose inactivation led to fragile, non-melanized eggshells.
- The loss of this protein caused multiple defects in egg structure.
- It was found that none of the eggs with deficient protein called eggshell organizing factor were viable.
- Since the protein is restricted to mosquitoes, it may provide a useful target for developing more biosafe mosquito control strategies.
- The drug uses a technique called RNAi, which inactivates messenger RNA and thus blocks expression of the targeted gene.
- Once the target gene is altered, researchers can use gene drive technology using CRISPR gene editing to inherit the property to younger generations.
- According to World Malaria Report 2018, globally an estimated 219 million cases of malaria occurred with 4,35,000 deaths due to malaria in 2017.
- India accounted for 4% of deaths due to malaria.
- The World Health Organization in its Global technical strategy for malaria 2016–2030 has set a target to eliminate malaria worldwide by 2030.
Status of malaria in India
- In India, malaria cases have consistently declined from 20.8 lakhs in 2001 to about 8.4 lakhs in 2017.
- Till September 2018, according to National Vector Borne Disease Control Programme, about 2.75 lakh cases of malaria were reported.
- The majority of malaria cases are being reported from states in the eastern, central and north-eastern part of the country.
- Odisha, Chhattisgarh, West Bengal, Jharkhand, Madhya Pradesh, Maharashtra, Tripura and Meghalaya account for a major burden of malaria cases.
National Framework for Malaria Elimination (2016-2030)
- In 2016, India launched the National Framework for Malaria Elimination as strategic roadmap to eliminate malaria by 2030.
- Eliminate malaria from all low and moderate endemic states and Union territories by 2022.
- Reducing the incidence of new cases of malaria to less than one case per 1000 population in all states and Union territories by 2024.
- This has been achieved with incidence of malaria in India is being 0.66 cases per one thousand population in 2017.
- Making India malaria-free by 2027.
- Malaria-free means interrupting and arresting indigenous transmission of malaria in all states by 2027.
- Eliminate malaria in all forms by 2030.
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Section : Science & Tech
- Recently, Iran has proposed a new platform - Persian Gulf Regional Dialogue Forum - for regional peace building in order to address the lingering conflicts and mistrust in the Gulf region.
- As per Iran, such a forum should offer membership to countries based on a set of general principles to address real issues that affect people of the region and the world.
- Iran has suggested starting with a Regional Dialogue Forum, particularly in the Persian Gulf region which has been the scene of so many wars in the last four decades; from Saddam Hussein’s aggression against Iran and later against Kuwait, to US operations and finally to the humanitarian nightmare in Yemen.
- Admission to such a forum should be based on accepting generally-recognised principles and shared objectives, notably respect for sovereignty, territorial integrity and the political independence of all states, suggesting that the forum should render international boundaries inviolable and use of force impermissible.
- It laid out a set of confidence building measures that the member countries will have to consider in this forum. These measures could include freedom of navigation, assurance of free flow of energy and other resources and protection of the fragile marine ecology of the Gulf.
- Iran also suggested the regional powers to ensure popular legitimacy of their governments and to ensure harmony among various groups and identities in the member countries.
- The announcement of Persian Gulf Regional Dialogue Forum is significant as it comes in the wake of continued erosion of the Gulf Cooperation Council, which in the recent years has been divided between the Iranian and the Saudi spheres.
- The new forum could focus on promotion of peace and prosperity in the region.
- The regional forum could connect people of various member countries cutting across all traditional boundaries.
- The forum may also be effective in dealing with threats like terrorism and extremism that has left the countries of the region in a state of continuous state of insecurity.
- The proposal is among the set of fresh initiatives that Iran has taken in recent months that also included Tehran connecting with the Taliban for peace talks.
Recent issues of the West Asia include:
- The Syrian conflict
- The war in Yemen
- The Gulf crisis
- The Iran-US standoff
- The Israeli-Palestinian conflict
- Regional polarisation
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Section : International Relation
- Sikkim’s ruling party, the Sikkim Democratic Front (SDF), has decided to include Universal Basic Income (UBI) in its manifesto ahead of the Assembly election in 2019 and aims to implement the scheme by 2022.
- If implemented, Sikkim will be the first state to roll out Universal Basic Income (UBI) and has started the process to introduce the unconditional direct cash transfer scheme.
What is Universal Basic Income?
- Universal basic income (UBI) is a model for providing all citizens of a country or other geographic area with a given sum of money, regardless of their income, resources or employment status.
- The purpose of the UBI is to prevent or reduce poverty and increase equality among citizens.
- The concept of universal basic income has three main features. They are as following:
- UBI is universal in nature. It means UBI is not targeted.
- UBI is cash transfer instead of in-kind transfer.
- UBI is unconditional, i.e. one need not prove his or her unemployment status or socio-economic identity to be eligible for UBI.
- Ensuring them a basic level of income for their basic minimal needs is the duty of the government.
- But the process is not an easy one for a country like India which has a vast population.
- UBI is a scheme that a number of economists have talked about and it works well in developing countries. It has been tested even in India, debated within the Finance Ministry as early as 2017
- The 2017 Economic Survey had flagged the UBI scheme as “a conceptually appealing idea” and a possible alternative to social welfare programmes targeted at reducing poverty.
Arguments in favour of UBI
- UBI strengthens economic liberty at an individual level. This would help them to choose the kind of work they want to do, rather than forcing them to do unproductive work to meet their daily requirements.
- It would be a sort of an insurance against unemployment and hence helps in reducing poverty.
- It will result in equitable distribution of wealth.
- Increased income will increase the bargaining power of individuals, as they will no longer be forced to accept any working conditions.
- UBI is easy to implement. Because of its universal character, there is no need to identify the beneficiaries. Thus it excludes errors in identifying the intended beneficiaries – which is a common problem in targeted welfare schemes.
- As every individual receive basic income, it promotes efficiency by reducing wastages in government transfers. This would also help in reducing corruption.
Arguments against UBI
- The additional income can be spent on ‘temptation goods’ such as alcohol, tobacco, drugs etc. rather than on education, health etc.
- A guaranteed minimum income may breed dependency. People may opt out of labour market.
- Given the large population size, the fiscal burden on government would be high.
- Also, as Economic Survey 2016-17 noted, once implemented, it may become difficult for the government to wind up a UBI in the case of failure.
- A ‘guaranteed minimum income’ might reduce the availability of workers in some sectors which are necessary but unattractive and raise the wages of such works.
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Section : Economics
- In a study of the anthropological profile of the Harappan people, archeologists have found the skeletal remains of a couple at Rakhigarhi, Haryana, hinting towards the prevalence of institution of marriage in Harappan times.
- Archeologists have discovered skeletal remains of a young male and female in an archeological burial site at Rakhigarhi, Haryana.
- This is the only grave where 2 individuals of opposite sex are found together at the Rakhigarhi burial site.
- The skeletal remains were found in a supine position with arms and legs extended, indicating an intimate relationship.
- According to the researchers, this could be an indication of societal acceptance of their relationship.
- Thus, it is concluded that the institution of marriage probably originated in the Harappan civilisation.
About Rakhigarhi project
- Between 2013 and 2016, researchers from India and South Korea have carried out a series of excavations at Rakhigarhi, one of the most prominent sites of the Harappan civilisation.
- The main aim of the project is to understand the Harappan population through extraction and analysis of DNA obtained from teeth and jaw bones.
- They are aslo studying the remains of their habitation to understand their daily habits and ways of life.
- The DNA analysis will also help figure out their height, body features, and even the colour of their eyes.
- The Rakhigarhi project has discovered a major burial site dated Harappan period.
- The necropolis is dated between 2,500 BC and 2,000 BC, or the Mature Harappan Period.
- The series of excavations reveal burials classified as
- Primary burials in which bodies were buried inside a plain pit;
- Secondary burials in which only a few human bones were found along with votive pots and
- Symbolic burials in which only pots were found.
- Burial grounds have also been discovered in Lothal (Gujarat); Kalibangan (Rajasthan); Farmana (Haryana), Sanauli (UP), and during a previous Archaeological Survey of India excavation in Rakhigarhi in 1997-2000.
- There are five big known centres of the Harappan civilisation — three in Pakistan (Harappa and Ganweriwala in Punjab, and Mohenjo Daro in Sindh), and two in India (Dholavira and Rakhigarhi).
Significance of the project
- While earlier Harappan studies have focused primarily on urban design, crafts and trade, funeral customs say a lot about a community, what its people value, its social heirarchy, gender relations, and how it treats its children.
- Further forensic-anthropolgical studies of remains can reveal much about what a people ate their longevity, and why and how they died.
- The current discovery of skeletal remains of a couple indicates the prevalence of institution of marriage during Mature Harappan period.
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Section : History & Culture
Massive subsidies to farmers:
- Today, India gives farmers 2.2 trillion rupees in subsidies on fertiliser, power, crop insurance, seeds, credit, irrigation and a myriad other items.
- India has a massive programme of procurement of grains at above market prices;
- There is also the programme of highly subsidised food grains to 75% of rural population
Apart from other benefits to rural areas:
- We offer guaranteed employment for 100 days to one adult in each rural household.
- We run schemes that provide houses and LPG connections to rural poor and free primary education and free primary health care to rural households.
- Finally, substantial resources have been invested in bringing roads, digital connectivity and electricity to rural areas.
Why then is there farmer distress?
- After seven decades of development effort, we need to understand why stories of widespread farmer distress come out often.
- There is enough evidence to suggest that the stories of distress are real.
Agriculture has seen far slower progress than industry and services:
- India lost nearly four decades following the independence to poorly conceived policies, due to which it remains a relatively low per capita income country.
- Within this broad scenario, agriculture has seen far slower progress than industry and services.
- Over the 65 year period spanning 1951-52 to 2016-17, industry has grown at the annual average rate of 6.1%, services 6.2% and agriculture only 2.9%.
- The result of this asymmetry in growth rates has been that the share of agriculture in GDP has fallen from a hefty 53.1% in 1950-51 to just 15.2% in 2016-17.
Fall in share of agriculture is normal:
- By itself, this decline in share is neither unusual nor a reason for despair.
- It is a fact of growth that industry and services grow faster than agriculture with the result that the share of the latter sector in the GDP dwindles as the country grows rich in per capita terms.
- Today, the share of agriculture in the GDP is tiny in every country that has achieved high per capita income: 2% in South Korea, 1.6% in Taiwan, 1.5% in France, 1% in Japan and the United States, and 0.5% in the United Kingdom.
But employment in agriculture hasn't fallen in India:
- India’s tragedy is that, unlike these countries, it has not achieved a commensurate decline in the share of agriculture in employment.
- Today, employment share of agriculture stands at 5% in South Korea and Taiwan, 3.5% in Japan, 3% in France, 2% in the United States, and 1% in the United Kingdom.
- In contrast, the share of agriculture in employment in India remains stubbornly high at around 45%.
- Results in low per worker output in agriculture:
- As a result, per worker output in agriculture today is just one-third that of the nationwide GDP per worker, which is itself low.
- On top, a gigantic 68.5% of operational holdings are smaller than one hectare.
- Per worker output on these tiny holdings is lower than per worker output within agriculture, itself one-third of the GDP per worker.
Difficult to create farmer prosperity:
- The above facts imply that while the government can make improvements on the margin, it can do almost nothing within agriculture to create even a semblance of prosperity among farmers.
- Marketing reform can only add some benefit:
- Marketing reform, even if successfully implemented – and this is a big if – cannot go far.
- With the low per worker output, the scope for redistribution from a few rich traders to the vast numbers of farmers is quite small.
- Increases in productivity cannot go very far either:
- India is already self-sufficient in food grains.
- Therefore, any increase in food grain output would pose a marketing challenge.
- Selling the extra output at home would depress prices while exporting it would attract countervailing duties due to WTO illegal subsidies via the MSP.
- Diversification can also benefit only a few:
- Diversification is seen as an option but fruits and vegetables account for just 5% of cultivated area and animal husbandry for just 5% of workforce.
- Even doubling the output of these commodities within a short period would bring benefit to only a small proportion of the farmers while harming many others by sending prices into a tailspin.
- Processing and exporting the produce may help but only a small fraction of the associated benefit would accrue to farmers.
No measures can fully turnaround agriculture in India:
- It is delusional to think that the next farm loan waiver or yet another government scheme aimed at farmer welfare would magically turn the situation around.
- The harsh reality is that with too little output and too many to share it, no solution within agriculture would drastically improve the situation.
- Need to take people out of farming:
- We need to systematically remove obstacles – many of them erected by past policies – to the exit of the large number of marginal farmers from agriculture.
- Liberate labour intensive sectors:
- Simultaneously, we must unshackle labour intensive sectors in industry and services to create good jobs for them.
GS Paper III: Indian Economy
Section : Editorial Analysis