What’s in today’s article?

• Why in news?
• Definition of forest in India
• Forest Conservation Act 
• Background 
• News Summary: Forest (Conservation) Act and SC Judgement
• Key highlights of the judgement

Why in news?

• The Supreme Court told States and Union Territories to act as per the definition of ‘forest’ laid down in its 1996 judgment for identifying and preserving forest land.
• It asked States/UTs to refrain from using the 2023 amendment to the Forest (Conservation) Act.
  • The amendment act allegedly removed 1.97 lakh square km of land from forest area.

Definition of forest in India

• No clear definition
  • At present, in India, there is no clear nationally-accepted definition of ‘forest’.
  • In September 2019, the Forest Advisory Committee (FAC) observed that there cannot be any uniform criteria to define forest which can be applicable to all forest types in all states and union territories.
• Responsibility of States
  • States are responsible for determining their definition of forests.
  • In November 2019, the environment ministry emphasised that the states, having well-established forest departments.
  • They are in a better position, rather than the MoEFCC, to understand their own forests and needs, and should frame criteria for their forests.
  • The prerogative of the states to define forests stems from a 1996 Supreme Court order called the T.N. Godavarman Thirumulpad Vs the UoI
• Godavarman Thirumulpad judgment
  • In 1995, T.N. Godavarman Thirumulpad filed a writ petition with the Supreme Court to protect the Nilgiris forest land from deforestation by illegal timber operations.
  • One of the aspects of the judgement is related to the meaning of the word forest.
  • In the judgement, the Supreme Court interpreted that the word forest must be understood according to its dictionary meaning.
  • This description covers all statutorily recognised forests, whether designated as reserved, protected or otherwise.
  • The ruling instructed state governments to form a panel of experts to recognize, declare, and outline areas as forests.
  • It also offered additional instructions on managing forest areas, including transferring forest land for non-forest purposes, as per the Forest Conservation Act, 1980.

Forest Conservation Act

• The Forest Conservation Act 1980
  • It was enacted to -
    • protect India’s forests and
    • empower the Central government to regulate the extraction of forest resources (from timber and bamboo to coal and minerals) by industries as well as forest-dwelling communities.
• Forest (Conservation) Amendment Act 2023
  • Inserted a ‘preamble’ that underlines -
    • India’s commitment to preserving forests, their biodiversity and tackling challenges from climate change and
    • Amending the name of the Act to Van (Sanrakshan Evam Samvardhan) Adhiniyam (translated as Forest Conservation and Augmentation) from the existing Forest (Conservation) Act.
  • The Act would only apply to: Lands notified in any government record as ‘forest’ on or after 1980.
  • Exemptions: The Act would not apply -
    • If notified forest land was legally diverted between 1980 and 1996, for non-forest use.
    • To forest land situated 100 km away from international borders and to be used for “strategic projects of national importance” or
    • To land ranging from 5-10 hectares for security and defence projects.
  • The Act specifies some activities that can be carried out in forests, such as establishing check posts, fencing, and bridges.
  • The Bill also allows running zoos, safaris and eco-tourism facilities.
  • The state government requires prior approval of the central government to assign any forest land to a private entity.
    • The Bill extends this to all entities, and allows the assignment to be made on terms and conditions specified by the central government.

Background

• Petitions filed in SC against
  • Petitions were filed challenging the amendments introduced in 2023 to the Forest (Conservation) Act, 1980.
  • The petitions had argued that Section 1A introduced through the amended Act had substantially diluted the definition of forest to two categories:
    • declared forests and
    • lands recorded as forests in ‘government records’ after 1980.
• Stand of Centre
  • The government rejected claims of reducing forest coverage.
  • It highlighted an amendment to Section 1A, broadening the definition of government records to include lands recognized as forest by state or union territory authorities, local bodies, councils, or recognized communities.

News Summary: Forest (Conservation) Act and SC Judgement

• The Supreme Court issued a temporary order instructing States and Union Territories to follow the 1996 definition of forest from the T.N. Godavarman Thirumalpad case.

Key highlights of the judgement

• 
• Forest will continue to have a broad and all-encompassing meaning
  • SC directed that the expression ‘forest’ will continue to have a “broad and all-encompassing” as per the 1996 judgement.
    • This means it includes 1.97 lakh square km of undeclared forest lands.
  • The Bench emphasized that the broad dictionary meaning of "forest" upheld by the Supreme Court over 25 years ago will still apply.
  • This will continue until the States and union territories compile a comprehensive record of all lands marked as 'forest' in government records, including forest-like areas, unclassified, and community forest lands.
• Directions to states
  • SC also directed states to file, by the end of March, reports on forest land identified as per its ruling in the T N Godavarman case.
• Establishment of zoos or safaris
  • The Bench also mandated that no government or authority should proceed with the establishment of "zoos or safaris" without the final approval of the apex court.

Q1) What is Zoo safari?

A zoo safari is a commercial drive-in tourist attraction where visitors can drive their own vehicles or ride in vehicles provided by the facility to observe freely roaming animals. Safari parks are larger than zoos and smaller than game reserves. 

Q2) What is Forest Advisory Committee (FAC)?

The Forest Advisory Committee (FAC) is a statutory body established under the Forest Conservation Act (FCA) of 1980.

Source: Go back to dictionary meaning of ‘forest’: Supreme Court

PIB | Mongabay | PRS India | Times of India

What’s in today’s article?

• Why in news?
• What is National Payments Corporation of India (NPCI)?
• What is UPI?
• News Summary: Parliamentary Committee on local fintech players
• What does the report infer about the existing ecosystem?
• What are the concerns about fraud?
• Way forward

Why in news?

• In its recent report, the Standing Committee on Communications and Information Technology expressed worries about foreign-owned fintech apps having too much control in India.
• The committee suggested that Indian-owned apps should be encouraged more.
• It pointed out that while the Unified Payments Interface (UPI) made up a large portion (73.5%) of all digital payments in terms of volume in the fiscal year 2022-23.
• However, its share of the total payment value was much smaller, at only 6.67%.

National Payments Corporation of India (NPCI)

• NPCI is an umbrella organisation for operating retail payments and settlement systems in India.
• It is an initiative of RBI and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007.
• The objective of NPCI is to create a robust Payment & Settlement Infrastructure in India.
  • For this, NPCI was incorporated as a “Not for Profit” Company under the provisions of Section 25 of Companies Act 1956 (now Section 8 of Companies Act 2013).

UPI

• It was launched by NPCI.
• UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood.
• It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.

News Summary: Parliamentary Committee on local fintech players

What does the report infer about the existing ecosystem?

• Regulation of Digital Payment Apps
  • The Committee underscored the importance of regulating digital payment apps due to their increasing usage in India.
  • It highlighted that regulating local apps, compared to foreign ones, would be more practical for entities like the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI).
• Domination of Foreign-Owned Fintech Apps
  • The Committee noted the dominance of fintech apps owned by foreign entities, such as PhonePe backed by Walmart and Google Pay, in the Indian fintech sector.
  • PhonePe holds the largest market share in terms of transaction volume, followed by Google Pay.
  • As per the statistics were recorded between October and November 2023:
    • PhonePe accounted for 46.91% of the market share.
    • Google Pay held 36.39% of the market share.
    • In comparison, NPCI's BHIM UPI only had a 0.22% market share in volume terms.
• Usage Statistics
  • NPCI's data from December last year revealed:
    • Customers initiated a total of 5,642.66 million transactions using PhonePe.
    • Another 4,375 million transactions were made using Google Pay.
    • Only about 24.30 million transactions were made using BHIM.
• Committee’s recommendation supported NPCI's Transaction Volume Cap
  • In November 2020, the NPCI implemented a 30% volume cap on transactions conducted through the Unified Payments Interface (UPI).
  • This regulation aimed to limit the number of transactions initiated by third-party apps like PhonePe and Amazon Pay, ensuring a balanced usage of the interface.
    • Originally, apps exceeding the prescribed cap were given a two-year period to comply with the directive, scheduled to conclude by December 31, 2022.
    • However, citing the need for further expansion and equilibrium in the UPI ecosystem, the compliance deadline was extended to December 31, 2024, in December 2022.
  • The committee supported this regulation in its report.

What are the concerns about fraud?

• Fintech Companies and Money Laundering Concerns
  • The Committee highlighted that fintech companies were being exploited by scamsters for money laundering purposes.
  • An example cited was the Abu Dhabi-based app called Pyppl, which was reportedly administered by Chinese investment scamsters.
  • This situation posed challenges for Indian law enforcement agencies in tracking the flow of illicit funds gathered through scams on the platform.
• Fraud Trends and Ratio
  • Despite an increase in the volume of transactions over the past five years, the ratio of fraudulent transactions to total transactions has remained relatively low.
  • The fraud to sales ratio, representing the proportion of fraudulent transactions to total transactions in a financial year, hovered around 0.0015%.
  • As of September 2023, in the ongoing financial year, this figure slightly increased to 0.0016%.
• Impact on UPI Users
  • The percentage of UPI users affected by frauds stood at 0.0189%.
  • Despite concerns about fintech platforms being used for illegal activities, the overall impact on users remained relatively low compared to the total volume of transactions.

Way forward

• Advantages of Local and Foreign Fintech Players
  • Local fintech companies possess a natural advantage in comprehending the intricacies of the customer base, various ecosystem participants, and the digital public infrastructure within the Indian market.
  • They are also well-versed in navigating the broader market infrastructure.
  • Conversely, foreign fintech firms excel in leveraging new technologies, employing innovative techniques, and capitalizing on global connectivity.
  • Hence, there is the necessity of fostering a balanced mix of local and foreign fintech players to effectively serve the Indian ecosystem.
  • This balance would be crucial across diverse sectors such as payments, lending, wealth management, and insurance.
• Regulatory Emphasis on Accountability and Compliance
  • Analysts acknowledged the regulator's emphasis on the criticality of accountability and compliance with local laws.
  • They underscored the importance of adherence to regulatory frameworks to ensure the integrity and stability of the fintech sector within the Indian market.

Q1) What is fintech?

The word “fintech” is simply a combination of the words “financial” and “technology”. It describes the use of technology to deliver financial services and products to consumers.

Q2) What is money laundering?

Money laundering is the process of hiding the source of money obtained from illegal sources and converting it to a clean source, thereby avoiding prosecution, conviction, and confiscation of the criminal funds. It is an illegal exercise that converts black money into white money.

Source: What did the Parliamentary Committee recommend with respect to local fintech players? | Explained | NPCI | The Economic Times

What’s in Today’s Article?

• Why in the News?
• About Minimum Support Price (MSP)
• Crops Covered Under MSP
• How Does the Government Decide on the MSP?
• How Can the Government Provide Legal Guarantee for MSP?
• Consequences of According Legal Stature to MSP
• Suggestions
• News Summary

Why in the News?

• During the fourth round of talks with protesting farmers, the Central government presented a proposal for crop diversification in Punjab.
• Under the proposal, government promoted cooperatives would offer five-year contracts to procure five crops — tur (arhar), urad dal, masur (lentil), maize, and cotton — at Minimum Support Prices (MSP).

About Minimum Support Price (MSP)

• In 1966-67, as a part of extensive agricultural reforms, MSP was introduced for the first time by the Central Government.
• Minimum support price (MSP) is a “minimum price” for any crop that the Government considers as remunerative for farmers and hence deserving of “support”.
• It is also the price that Government agencies pay whenever they procure the particular crop from the farmers.
• It is a way of protecting the farmers in India from the uncertainties of the markets as well as those of the natural kind.
• There is currently no statutory backing for these prices, nor any law mandating their enforcement.

Crops Covered Under MSP

• At present, the Central Government sets MSP for 23 crops.
• These include:
  • 7 cereals (bajra, wheat, maize, paddy barley, ragi and jowar);
  • 5 pulses (tur, chana, masur, urad and moong);
  • 7 oilseeds (safflower, mustard, niger seed, soyabean, groundnut, sesame and sunflower);
  • 4 commercial crops (raw jute, cotton, copra and sugarcane).

How Does the Government Decide on the MSP?

• The Government announces the MSP at the start of each cropping season (Rabi and Kharif).
• The MSP is decided after the Government exhaustively studies the recommendations made by the Commission for Agricultural Costs and Prices (CACP).
  • CACP is an attached office of the Ministry of Agriculture and Farmers Welfare.
• These recommendations are based on a pre-fixed formulae. This includes the actual cost incurred, implicit family labour as well as the sort of fixed assets or rent paid by the farmers.

How Can the Government Provide Legal Guarantee for MSP?

• Primarily, there are two ways that the government can provide legal guarantee for MSP. Both have severe economic repercussions:
  • First, the Government can declare MSP as the baseline price for the 23 crops in the market. It’ll be a mandate for private players to pay MSP rates, which may lead to price rise.
  • Secondly, the Government itself can buy all 23 crops at MSP.

Consequences of According Legal Stature to MSP

• A policy paper by NITI Aayog’s agricultural economist Ramesh Chand argues that price level that is not supported by demand and supply cannot be sustained through legal means.
• The paper noted that segments like horticulture, milk and fishery (where market intervention is nil or very little) showed 4-10% annual growth whereas the growth rate in cereals, where MSP and other interventions are quite high, remained at 1.1% after 2011-12.
• Higher procurement cost would mean increase in prices of food grains, leading to inflation, which would eventually affect the poor.
• There also lies practical difficulties in getting the private sector on board for buying at legally guaranteed MSP.
• The paper cited the example of sugarcane – where the support price (Fair and Remunerative Price (FRP)) is the statutory minimum price – and pointed out the accumulation of crores in arrears as private sugar mills could not find FRP for sugarcane matching with sugar prices.

Suggestions

• Provide Direct Income Support:
  • MSP is a short-term solution. It is not a sustainable solution for all of Indian agriculture.
  • Instead of arbitrarily fixing prices of goods in the market, the more effective way might be to provide direct income support to those who are poor — regardless of whether they are farmers or not.
• Investment Boost to Infrastructure:
  • Better irrigation facilities, easier access to credit, timely access to power, creating lots of warehouses, and ramping up of extension services including post-harvest marketing.
  • It is when such facilities are provided — either free or at an accessible price point — that the Indian farmer would become less vulnerable.
• Eliminate Disguised Unemployment in Agriculture sector:
  • The solution to the economic distress of Indian farmers lies outside agriculture. It lies in boosting India’s industrial and services sectors.
  • These are the two sectors that can absorb the excess labour that is engaged at present in extremely unremunerative farm activities and provide them with well-paying jobs.
  • It is only when industries and services sectors grow rapidly for the next couple of decades that India’s farm distress will get alleviated.

News Summary

• The fourth meeting between Union Ministers and farmer representatives to deliberate on their demands, including a legal guarantee for minimum support price on crops, remained inconclusive.
• However, the meeting moved in a ‘positive’ direction as the government proposed to give a guarantee on procuring of five crops on Minimum Support Price (MSP).
• A proposal was discussed in which the government agencies like NCCF and NAFED will get into a contract and buy produce pulses - arhar, tur and urad, and corn from the farmers on MSP.
  • There will be no limit on the quantity.
• Similarly, the government proposed that the Cotton Corporation of India will enter 5-year agreement with farmers to buy cotton crops at MSP.
• However, the protesting farmers have rejected the above mentioned proposals & demanded a legally guaranteed MSP for all crops across the country.

Q1) What is the role of the Commission for Agricultural Costs and Prices?

The Commission for Agricultural Costs and Prices (CACP), set up in 1965, is a decentralized agency of the Government of India (GoI). It is an expert body that recommends the Minimum Support Prices (MSPs) by taking into consideration various factors.

Q2) What is M S Swaminathan famous for?

M S Swaminathan is known as "Indian Father of Green Revolution" for his leadership and success in introducing and further developing high-yielding varieties of wheat in India.

Source: Centre offers contract-based assured buying on MSP for five crops; farmers to get back today | Indian Express