Daily Current Affairs for UPSC CSE
Topics Covered
- RBI’s Digital currency
- Operation AAHT
- Maternity Benefit Schemes
- Brahmos
- Facts for Prelims
1 . India’s Central Bank Digital Currency
Context : In the Budget presented for 2022-23, Finance Minister Nirmala Sitharaman had announced the introduction of India’s Central Bank Digital Currency (CBDC) and that the digital rupee would give a ‘big boost’ to digital economy. She had indicated that technologies such as blockchain would be used by the Reserve Bank of India to issue the currency, starting 2022-23. The Reserve Bank had, in July 2021, indicated that it would soon begin work on the ‘phased implementation’ of the CBDC.
What is a Central Bank Digital Currency?
- CBDC or Central Bank Digital Currency is a legal tender issued by the Reserve Bank of India.
- A CBDC is an electronic record or digital token of a country’s official currency, which fulfils the basic functions as a medium of exchange, unit of account, store of value, and standard of deferred payment.
- According to the RBI website, CBDC is the same as currency issued by a central bank but takes a different form than paper (or polymer).
- It is sovereign currency in an electronic form and will appear as liability (currency in circulation) on a central bank’s balance sheet. CBDCs should be exchangeable at par with cash.
Why are central banks issuing digital currencies?
Adoption of CBDC has been justified for the following reasons:-
- Central banks, faced with dwindling usage of paper currency, seek to popularize a more acceptable electronic form of currency
- Central banks seek to meet the public’s need for digital currencies, manifested in the increasing use of private virtual currencies, and thereby avoid the more damaging consequences of such private currencies.
- Central banks also believe that the cost of issuing digital currencies is far lower than the cost of printing and distributing physical cash. The RBI can create and distribute the digital rupee at virtually zero cost since the creation and the distribution of the digital rupee will happen electronically.
- Another likely reason for the introduction of digital cash may be to bring down the use of physical cash. Unlike physical cash, which is hard to trace, a digital currency that is monitored by the RBI can be more easily tracked and controlled by the Central bank. This feature of digital currencies, however, has raised various concerns regarding their privacy and could slow down their adoption. In fact, it is worth noting that the need for privacy has been one of the primary reasons behind the switch to private digital currencies.
What are the risks in adopting digital currencies issued by Central banks?
- Many, including various central bankers, fear that people may begin withdrawing money from their bank accounts as digital currencies issued by Central banks become more popular When the digital wallet offered by the RBI can serve the same purpose, people could very well begin converting their bank deposits into digital cash.
- One thing that could prevent any large flight of capital from bank accounts to digital currencies is the fact that bank accounts, unlike digital currencies, offer interest on deposits. But in developed economies, where interest rates are near zero or even negative, the risk of people rushing their money out of bank accounts and into digital currencies is real. This may not be an immediate concern for banks in India which still offer returns that are positive, at least in nominal terms, to their depositors.
- The withdrawal of bank deposits can also affect the amount of loans created by banks. However, this could happen not simply because banks will have fewer cash deposits to lend to borrowers. Contrary to popular belief, banks do not loan out actual cash deposits. Instead, they use cash deposits as a base on which they create a pyramid of electronic loans far in excess of the cash deposits. So banks hold lower amounts of cash in their vaults than what their depositors and borrowers could demand from them anyway. The real reason banks will be able to create fewer loans is that when customers convert their bank money into CBDCs, banks will be forced to surrender at least some cash and will thus possess an even smaller base on which to create loans. Also, when bank customers convert their deposits into digital rupee, the RBI will have to take these liabilities from the books of banks and onto its own balance sheet.
What lies ahead?
- There is speculation already that Central banks will cap the amount of money that an individual can hold in the form of CBDCs. This is to prevent the mass withdrawal of deposits from banks.
- Some even believe that some Central banks, such as the European Central Bank, may impose a negative penalty on their digital currencies. This could be done to force people to spend their digital currencies and to discourage the withdrawal of deposits from banks that impose negative interest rates.
- Central banks may also have to inject fresh money into banks to ensure that the ability of banks to create loans is not affected by depositors’ rush to digital currencies.
Facts
- In October 2020, the Bahamas launched the world’s first CBDC
2 . Operation AAHT
Context : The Railway Protection Force has launched a nationwide operation named as Operatio AAHT to curb human trafficking.
About Operation AAHT
- As part of “Operation AAHT”, special teams will be deployed on all long-distance trains/routes with focus on rescuing victims, particularly women and children, from the clutches of traffickers.
- As part of “Operation AAHT”, the infrastructure and intelligence network of the force could be utilised to collect, collate and analyse clues on victims, source, route, destination, popular trains used by suspects, identity of carriers/agents, kingpins etc and shared with other law-enforcing agencies.
- The RPF could act as a bridge cutting across States to assist the local police in the mission to curb the menace.
- Focus should be more on trains originating from districts bordering Nepal, Bangladesh and Myanmar.
Importance
- The Railways, which operate about 21,000 trains across the country daily, is the most reliable mode of transportation for the traffickers who often move their victims on long-distance trains.
- Thousands of Indians and persons from neighbouring countries were trafficked every day to some destinations where they were forced to live like slaves.
- They are also being trafficked for illegal adoptions, organ transplants, working in circus, begging and entertainment industry.
3 . Maternity Benefit Schemes
Context : The government’s recent announcement that the maternity benefit programme which provides ₹5,000 for first child will be extended to cover the second child only if it is a girl has met with sharp criticism from activists who have demanded that it be universalised.
About Pradhan Mantri Matru Vandana Yojana ( PMMVY)
- The Pradhan Mantri Matru Vandana Yojana (PMMVY), launched in 2017, provides ₹5,000 for the birth of the first child to partially compensate a woman for loss of wages.
- It also aims to improve the nutritional well-being of the mother and the child.
- The amount is given in three instalments upon meeting certain conditions. It is combined with another scheme, Janani Suraksha Yojana, under which nearly ₹1,000 is given for an institutional birth, so that a woman gets a total of ₹6,000.
- “Under the revamped PMMVY under Mission Shakti, the maternity benefit amounting to ₹6000 is also to be provided for the second child, but only if the second is a girl child, to discourage pre-birth sex selection and promote the girl child
Objectives
- Providing partial compensation for the wage loss in terms of cash incentive s so that the woman can take adequate res t before and after delivery of the first living child.
- The cash incentive provided would lead to improved health seeking behaviour amongst the Pregnant Women and Lactating Mothers (PW& LM).
Target beneficiaries
- All Pregnant Women and Lactating Mothers, excluding PW&LM who are in regular employment with the Central Government or the State Governments or PSUs or those who are in receipt of similar benefits under any law for the time being in force.
- All eligible Pregnant Women and Lactating Mothers who have their pregnancy on or after 01.01.2017 for first child in family.
- The date and stage of pregnancy for a beneficiary would be counted with respect to her LMP date as mentioned in the MCP card.
- Case of Miscarriage/Still Birth :
- A beneficiary is eligible to receive benefits under the scheme only once.
- In case of miscarriage/still birth, the beneficiary would be eligible to claim the remaining instalment(s) in event of any future pregnancy.
- Thus, after receiving the 1st instalment, if the beneficiary has a miscarriage, she would only be eligible for receiving 2nd and 3rd instalment in event of future pregnancy subject to fulfilment of eligibility criterion and conditionalities of the scheme. Similarly, if the beneficiary has a miscarriage or still birth after receiving 1 st and 2nd instalments, she would only be eligible for receiving 3rd instalment in event of future pregnancy subject to fulfilment of eligibility criterion and conditionalities of the scheme.
- Case of Infant Mortality: A beneficiary is eligible to receive benefits under the scheme only once. That is, in case of infant mortality, she will not be eligible for claiming benefits under the scheme, if she has already received all the instalments of the maternity benefit under PMMVY earlier.
- Pregnant and Lactating AWWs/ AWHs/ ASHA may also avail the benefits under the PMMVY subject to fulfilment of scheme conditionalities.
Issues with the scheme
- To provide maternity benefit only to the mother of the first-born is illegal as the National Food Security Act, 2013 lays down that every pregnant woman and lactating mother are entitled to it.
- The new announcement implies that women will be able to access the scheme only after the delivery, which will not have any impact on their nutritional uptake during the course of their pregnancy,
4 . Brahmos Missile System
Context : On January 28, Philippines signed a $374.96 million deal with BrahMos Aerospace Pvt. Ltd. for the supply of shore based anti-ship variant of the BrahMos supersonic cruise missile. This is the first export order for the missile which is a joint product between India and Russia and also the biggest defence export contract of the country.
What is the BrahMos missile system?
- BrahMos is a joint venture between India’s Defence Research and Development Organisation (DRDO) and Russia’s NPO Mashinostroyeniya.
- The missile derives its name from the Brahmaputra and Moskva rivers. Beginning with an anti-ship missile, several variants have since been developed and it is now capable of being launched from land, sea, sub-sea and air against surface and sea-based targets and has constantly been improved and upgraded.
- The missile has been long inducted by the Indian armed forces and the Army recently deployed BrahMos along the Line of Actual Control (LAC) in Arunachal Pradesh.
- The range of the BrahMos was originally limited to 290 kms as per obligations of the Missile Technology Control Regime (MTCR) of which Russia was a signatory.
- Following India’s entry into the club in June 2016, plans were announced to extend the range initially to 450 kms and subsequently to 600 kms. BrahMos with extended range upto 450 kms has been tested several times since.
Which other countries are in discussion for the BrahMos missiles?
- The coastal defence regiment of the Philippine Marines, which is under the Navy, will be the primary employer of the missile system. The Philippines contract includes delivery of three BrahMos missile batteries, training for operators and maintainers as well as the necessary Integrated Logistics Support (ILS) package.
- In addition to the deal signed last week by Philippines, there is another long pending deal under discussion for BrahMos missiles for the Philippines Army which could see progress in the near future. The procurement for Philippines Army (PA) is included in the Horizon 3 Modernisation programme of Philippines (Year 2023-2027)
- While the first export order for BrahMos took a long time, the next order is likely to be concluded soon with negotiations with Indonesia and Thailand in advanced stages. There is reportedly interest for BrahMos from countries in West Asia as well.
What is the status of defence exports?
- From 2016-17 to 2018-19, the country’s defence exports have increased from ₹1,521 crore to ₹10,745 crore, a staggering 700% growth. The value of exports of defence items including major items in Financial Year 2014-15 and 2020-21 was ₹1,940.64 crore and ₹8,434.84 crore respectively. As per data given by the Government, defence exports for 2020-21 stood at ₹8434.84 crore and the export target for financial year 2021-22 was ₹10,000 crore.
- In December 2020, the Cabinet Committee on Security (CCS) approved the export of indigenous Akash Surface to Air (SAM) missile systems which several countries in South East Asia and West Asia have expressed interest in.
Government Initiatives
- There have been a series of measures announced to incentivise and promote domestic defence manufacturing as well as efforts to boost exports which include simplified defence industrial licensing, relaxation of export controls and grant of No Objection Certificates (NOC), extending Line of Credit (LoC) to foreign countries to import defence products and empowering Defence Attaches in Indian missions abroad to promote defence exports. The draft ‘Defence Production & Export Promotion Policy (DPEPP) 2020’ is expected to be finalised soon.
- To provide faster approvals for export of major defence platforms, a committee comprising of the Defence Minister, External Affairs Minister and National Security Advisor was set up. The Defence Ministry had said in December 2020, that “This Committee would authorise subsequent exports of major indigenous platforms to various countries. The Committee would also explore various available options including the Government-to-Government route.”
- In the last few years, India has put out a range of military hardware on sale which includes various missile systems, Light Combat Aircraft (LCA), helicopters, warship and patrol vessels, artillery guns, tanks, radars, military vehicles, electronic warfare systems in addition to other weapons systems.
5 Facts for Prelims
Anticipatory bail
- Section 438 of the Code of Criminal Procedure (CrPC) talks about grant of bail to a person anticipating arrest.
- An application for such a bail can be made before a high court or a sessions court whenever anyone feels they may be arrested on accusation of having committed a non-bailable offence.
- So the difference between an ordinary bail order and an anticipatory bail order is that the former is granted after arrest and, therefore, leads to the release of the accused from custody, while an anticipatory bail is granted in anticipation of the arrest and is, therefore, effective at the very moment of arrest.
- A transit anticipatory bail is sought when a case against a person has been or is likely to be filed in a state different from the one in which he or she is likely to be arrested. So the purpose of a transit bail is to allow the person bail, so they can approach the appropriate court in the state in which the case has been filed for anticipatory bail.
- In the absence of transit anticipatory bail, the result would be that another state’s police could arrest a person from their home state without them having the opportunity to apply for anticipatory bail at all. The only option then left would be to apply for regular bail once they are arrested and taken to the state in which the case is registered.