Why in News?

• The Ministry of Statistics and Programme Implementation (MoSPI) recently released India's economic growth data for the current fiscal year's second quarter (July-Sept (Q2) for the FY 2022-23.
• India's gross domestic product (GDP) grew by 6.3% and gross value added (GVA) by 5.6% year on year in Q2, slower than the GDP growth rate in the same months in 2021.

 

What’s in today’s article?

• Key terminologies
• How to read the recently released data

 

Key Terminologies:

• Gross Domestic Product (GDP)

  • GDP and GVA are the two main ways to ascertain the country’s economic performance that measures national income.
  • The GDP is a monetary measure of all final products and services (those purchased by the final user) produced in a country over a certain period.
  • The GDP accomplishes this by adding total expenditures in the economy, examining who spent how much, thus, measuring the economy's overall "demand."
  • The economy has recovered since the pandemic, but the manufacturing sector's contraction has cast doubt on future demand.
  • Higher interest rates and no substantial increase in consumption against the backdrop of a slowing global economy will offer challenges in the current fiscal year's second half.

 

• Gross value added (GVA):

  • Gross Value Added (GVA) calculates the same national income from the supply side, by adding up all the value added (value of output minus the value of its intermediary inputs) across different sectors.
  • This value added is shared among the primary factors of production, labour and capital.
  • By looking at the GVA growth one can understand which sector of the economy is robust and which is struggling.
  • The biggest news in Q2 GVA data is the contraction in the manufacturing sector, which declined by 4.3%.
  • This is significant because manufacturing has a large potential for employment generation and can absorb excess agricultural labour.

 

What are the 4 key engines of GDP growth?

• Private consumption (Private Final Consumption Expenditure or PFCE).
• Government Final Consumption Expenditure (GFCE) on salaries, etc.
• Gross Fixed Capital Expenditure - investments (by businesses/govt) to boost the productive capacity of the economy.
• Net Exports (NX) = Exports minus imports.

 

How are GDP & GVA related?

• GDP = (GVA) + (Taxes earned by the government) — (Subsidies provided by the government).
• If the taxes > subsidies it provides, the GDP will be higher than GVA. For the Q2, the GDP (at Rs 38,16,578 crore) is much higher than the GVA (which is at Rs 35,05,599 crore).
• Though the GDP is derived by looking at the GVA data, GDP data is more valuable when looking at annual economic growth and comparing a country's economic growth to its growth in the past or to that of another country.

 

How to read the recently released data?

GVA:

Image Caption: Changeover in India’s economic sector

• It would be a mistake to conclude that only Covid and its aftereffects are to blame for India's poor manufacturing performance, as the country's manufacturing sector has struggled to add value for the past 6 years.
  • For example, according to CMIE data, manufacturing jobs were slashed by half between 2016 and 2020.
• One positive story emerging from the GVA pertains to agriculture (along with forestry and fishing), which has done better than expected by growing at 4.6%.

 

GDP

Image Caption: Breakdown of total GDP of India

• On the GDP side, the biggest engine of growth is private consumption expenditure. It typically contributes over 55% of India’s total GDP.
• This component is also crucial because it incentivizes businesses to make fresh investments and expenditures towards investments are the 2nd biggest contributor to the GDP, accounting for around 33% of the total.
• The biggest surprise is the contraction in government final consumption expenditures.
• While these types of expenditures account for just 10-11% of GDP, they have the potential to support an economy when people and businesses reduce their spending.

 

---

Q1) What is the difference between GDP and GVA?

The GDP gives the picture from the consumers’ angle or demand perspective, whereas the GVA gives a picture of the state of economic activity from the producers’ perspective or supply side.  

 

Q2) H2: What is potential GDP?

Potential gross domestic product (GDP) is the level of output which any economy can produce at a constant inflation rate

 

---

 

What’s in today’s article:

• Why in News?
• What are Heat Waves?
• What is India Cooling Action Plan (ICAP)?
• News Summary

 

Why in News?

• A new World Bank report finds that as temperatures steadily rise in India due to climate change, keeping spaces cool using alternative and innovative energy efficient technologies can open an investment opportunity of $1.6 trillion by 2040. 

 

What are Heat Waves?

• A Heat Wave is a period of abnormally high temperatures, more than the normal maximum temperature.
  • In India, Heat waves typically occur from March to June, and in some rare cases, even extend till July.
  • On an average, five-six heat wave events occur every year over the northern parts of the country.
• Heat wave is considered if maximum temperature of a station reaches at least 40°C or more for Plains and at least 30°C or more for Hilly regions.
  • Based on Departure from Normal Heat Wave: Departure from normal is 4.50°C to 6.40°C; Severe Heat Wave: Departure from normal is >6.40degree C
  • Based on Actual Maximum Temperature Heat Wave: When actual maximum temperature ≥ 45°C; Severe Heat Wave: When actual maximum temperature ≥47
• Rapid rises in heat gain compromises the body’s ability to regulate temperature.
  • It can result in a cascade of illnesses, including heat cramps, heat exhaustion, heatstroke, and hyperthermia.

 

What is India Cooling Action Plan (ICAP)?

• ICAP was launched in March 2019 by the Ministry of Environment, Forests and Climate Change.
• It provides a 20-year perspective and outlines actions needed to provide access to sustainable cooling.
• The Plan seeks to:
  • reduce cooling demand across sectors by 20% to 25% by 2037-38,
  • reduce refrigerant demand by 25% to 30% by 2037-38,
  • Reduce cooling energy requirements by 25% to 40% by 2037-38,
  • recognise “cooling and related areas” as a thrust area of research under national Science and Technology Programme,
  • training and certification of 100,000 servicing sector technicians by 2022-23, synergizing with Skill India Mission.

 

News summary

World Bank has released the “Climate Investment Opportunities in India’s Cooling Sector” report.

 

Key highlights of the report

• India’s vulnerability to heat waves

  • From 2030 onwards, more than 160 to 200 million people could be exposed to a lethal heat wave in India every year.
  • Around 34 million Indians will face job losses due to heat stress-related productivity decline.
  • The current food loss due to heat during transportation is close to $13 billion annually.

• Opportunity for India

  • By 2037, the demand for cooling is likely to be eight times more than current levels.
  • This could open an investment opportunity of $1.6 trillion by 2040 besides reducing greenhouse gas emissions significantly and creating 3.7 million jobs.

• Need to shift to a more energy-efficient pathway

  • With the demand for cooling shooting up, there will be a demand for a new air-conditioner every 15 seconds.
  • It can lead to an expected rise of 435% in annual greenhouse gas emissions over the next two decades.
  • There is a need to shift to a more energy-efficient pathway which could lead to a substantial reduction in expected CO2 levels.

• Suggestions to manage heat waves

  • The report proposes a roadmap to support New Delhi’s India Cooling Action Plan (ICAP) 2019.
  • Adopt climate-responsive cooling techniques as a norm in both private and government-funded constructions.
    • This can ensure that those at the bottom of the economic ladder are not disproportionately affected by rising temperatures.
    • India’s affordable housing program for the poor, the Pradhan Mantri Awas Yojana (PMAY), can adopt such changes on scale.
  • Enact a policy for district cooling which could lead to the consumption of 20-30% less power than the most efficient conventional cooling solutions.
    • District cooling technologies generate chilled water in a central plant which is then distributed to multiple buildings via underground insulated pipes.
    • This brings down the cost for providing cooling to individual buildings.
  • Fix gaps in cold chain distribution networks by investing in pre-cooling and refrigerated transport.
    • This will minimise rising food and pharmaceutical wastage during transport due to higher temperatures.
    • It can help decrease food loss by about 76% and reduce carbon emissions by 16%.
  • Improvement in servicing, maintenance and disposal of equipment that uses hydro chlorofluorocarbons.
    • This can create two million jobs for trained technicians over the next two decades.
    • It reduces the demand for refrigerants by around 31%.
  • Effective implementation of the Sendai Framework for Disaster Risk Reduction 2015-30 with the state playing a leading role is also suggested in the report.
    • The framework aims to achieve the substantial reduction of disaster risk and losses in lives, livelihoods and health and in the economic, physical, social, cultural and environmental assets of persons, businesses, communities and countries.

 

---

Q1) What causes heat waves in India?

Heat waves are caused due to the rising global temperature, concretization of urban areas, large-scale deforestation, and urban heat island effect.

 

Q2) What are the health impacts of heat waves?

Heatwaves can lead to heat cramps that includes swelling and fainting generally accompanied by fever, heat exhaustion, fatigue, weakness, dizziness, headache, nausea, vomiting, muscle cramps, sweating, and heat stroke which can become fatal.

 

---

 

What’s in today’s article?

• Gas Pricing (Mechanism, Review, Criticism, etc.)
• News Summary (Kirit Parikh Committee’s recommendations)

 

Why in News?

• The Kirit Parikh Committee, which was set up by the government to review the gas pricing formula, has submitted its recommendations to the Ministry of Petroleum and Natural Gas (MOP&NG).

 

What is the procedure for gas pricing in India?

• Much of the natural gas being produced in the country does not command a market-determined price — that is, it is not determined by buyers and sellers based on demand-supply dynamics in the market.
• Rather, a formula is used to fix the price of the fuel every six months.
• As per this formula, the domestic gas price is the weighted average price of four global benchmarks —
  • US-based Henry Hub,
  • Canada-based Alberta gas,
  • UK-based NBP, and
  • Russian gas.
• The domestic price is based on the prices of these international benchmarks in the prior year, and kicks in with a quarter’s lag. It applies for six months.
• So, the price applicable from April 1 to September 30, 2022 is based on benchmark prices from January to December 2021.

 

Evaluation of Gas Pricing Formula

• This formula-based pricing has some interesting features and outcomes.
• One, the formula has no mention about gas actually imported into India. Typically, gas imported in Asian markets is costlier than many international benchmarks.
  • In effect, the price of domestic gas is lower than that of gas imports.
• Second, the averaging of benchmark prices over the past year and then the time lag of a quarter mean that the domestic gas price movement is often out of sync with what’s really happening on the ground.

 

What is the criticism of gas pricing formula?

• Domestic gas prices have been rising in the past couple of years but thanks to the formula, they are still cheaper than imported gas.
• Now, this acts as a disincentive to local producers such as ONGC, Oil India, and Reliance Industries who often find that the price is not worth their time and effort to increase output.
• This eventually leads to increased gas imports at higher prices.

 

Gas Pricing Formula Review

• What India needs to do to have a mature gas market is to review is its existing formula.
• The argument put forth is that the formula is based on markets which are either very matured or are themselves producers and not exactly India-specific.
• India has set the target to raise share of natural gas in energy mix to 15 per cent by 2030, and to attain this, the entire eco-system needs to be addressed.

 

India’s growing gas import dependency

• India is the world’s second-largest gas importer. It sources roughly half of its needs from foreign suppliers, primarily from West Asian producers in Saudi Arabia, Qatar, Oman and Kuwait.
• Over the years, India’s import dependency for natural gas has steadily risen and now is inching towards 50 per cent.
• The consumption of Liquefied petroleum gas (LPG) rose sharply after the Pradhan Mantri Ujjwala Yojana (PMUY) was launched in 2016.

 

 News Summary:

• In September, the government constituted the committee, led by energy expert Kirit Parikh, to review the gas pricing formula for gas produced in the country with the aim to ensure a fair price even as global prices for gas remained high.
• The committee has submitted its recommendations to the Ministry of Petroleum and Natural Gas (MOP&NG).

 

What are the major recommendations of the Kirit Parikh Committee?

Image Caption: Recommendation of Kirit Parikh Committee

• The committee has recommended a price band of $4-6.50/unit for gas from old legacy fields, which account for over 70 per cent of the domestic output.
  • A price band will ensure a predictable pricing regime for producers and protect consumers by moderating CNG and PNG price spikes.
    • State run ONGC and OIL largely operate legacy fields in the country.
• The panel had suggested linking the price of gas produced by state-owned firms from fields given to them on a nomination basis to imported crude oil prices rather than benchmarking them to gas rates in international market
• The committee has proposed abolishing formula-based gas pricing and implementing fully market-determined rates by January 2027.
• It also suggested including natural gas in the one-nation-one-tax regime of GST.
  • It can be done by subsuming excise duty charged by the central government and varying rates of VAT levied by state governments.
• To address state concern of loss of revenue, the panel was in favour of setting up a mechanism similar to the compensation cess regime.
  • This regime made good for any revenue loss that states incurred by way of giving their right to levy VAT and other taxes on goods and services in first five years of implementation of GST regime from July 1, 2017.
• Also, the panel was in favour of moderation in rates of excise duty.

 

---

What is the composition of natural gas?

Natural gas is composed almost entirely of methane although it does contain small amounts of other gases--ethane, propane, butane, and pentane. Methane is composed of a molecule of one carbon atom and four hydrogen atoms.

 

Where is natural gas found in India?

Natural Gas in India is mainly found in Gulf of Kutch, Gulf of Khambhat, Bassein field, Bombay High, Barmer in Rajasthan, Krishna Godavari basin, Cuddalore district of Tamil Nadu, Odisha, Assam, Tripura, etc.

 

---

 

What’s in today’s article?

• Great Indian Bustard (GIB) – About, habitat and status, threats, conservation measures, SC’s intervention
• Project Tiger

 

Why in News?

• Coming to the rescue of the critically endangered Great Indian Bustard (GIB), the Supreme Court has mooted the idea of launching 'Project GIB' on the lines of 'Project Tiger’.
  • Project Tiger was started in 1973 to save the big cats.
• The apex court has sought the government's view on the proposal.

 

What are the characteristics of the Great Indian Bustard?

• GIBs are the largest among the four-bustard species found in India.
  • The other three being MacQueen’s bustard, lesser florican and the Bengal florican.
• Being terrestrial birds, they spend most of their time on the ground with occasional flights to go from one part of their habitat to the other.
• They feed on insects, lizards, grass seeds etc. GIBs are considered the flagship bird species of grassland and hence barometers of the health of grassland ecosystems.

 

What is the habitat and status of Great Indian Bustard?

• Great Indian Bustard is found mainly in Rajasthan and Gujarat. It has been categorized as critically endangered by the International Union for Conservation of Nature (IUCN).
  • As per the 2021 report of the IUCN, they are on the verge of extinction with hardly 50 to 249 of them alive.
• GIBs’ historic range included much of the Indian sub-continent but it has now shrunken to just 10 per cent of it.
• Among the heaviest birds with flight, GIBs prefer grasslands as their habitats.

 

What are the threats to Great Indian Bustard?

• Scientists of Wildlife Institute of India (WII) have been pointing out overhead power transmission lines as the biggest threat to the GIBs.
  • WII research has concluded that in Rajasthan, 18 GIBs die every year after colliding with overhead powerlines.
  • These birds, due to their poor frontal vision, can’t detect powerlines in time and their weight make in-flight quick manoeuvres difficult.
• Kutch and Thar desert are the places which have witnessed creation of huge renewable energy infrastructure over the past two decades.
• This led to installation of windmills and construction of power lines even in core GIB areas.

 

What are the conservation measures for the Great Indian Bustard?

• In 2015, the Central government launched the GIB species recovery programme.
• Under the programme, the WII and Rajasthan forest department have jointly set up conservation breeding centres where GIB eggs harvested from the wild are incubated artificially and hatchlings raised in controlled environment.
• The plan is to create a population which can act as insurance against the threat of extinction and release the third generation of these captive-bred birds into the wild.

 

Supreme Court’s intervention to protect the Great Indian Bustard

• The SC in April 2021 ordered that all overhead power transmission lines in core and potential GIB habitats in Rajasthan and Gujarat be made underground.
• The SC also formed a three-member committee, including Devesh Gadhvi, the member of the bustard specialist group of IUCN, to help power companies comply with the order.
• Again, in November 2022, the court sought reports from chief secretaries of the two states in six weeks on installation of bird diverters in priority areas.
• It also asked them to assess the length of transmission lines that need to go underground.

 

What is the Project Tiger?

• The Govt. of India had launched “Project Tiger” on 1st April 1973 to promote conservation of the tiger.
• The Project Tiger Directorate of the Ministry of Environment and Forests was mandated with the task of providing technical guidance and funding support.
• National Tiger Conservation Authority (NTCA)
  • Project Tiger has been converted into a statutory authority (NTCA) by providing enabling provisions in the Wild Life (Protection) Act, 1972 through an amendment, viz. Wild Life (Protection) Amendment Act, 2006.
  • The NTCA addresses the ecological as well as administrative concerns for conserving tigers.
  • It provides a statutory basis for protection of tiger reserves, apart from providing strengthened institutional mechanisms for the protection of ecologically sensitive areas and endangered species.

 

---

Q1) Why are the Great Indian Bustards endangered?

The main threats to the shrinking habitat of the GIB have been industrialization, mining, intensive agricultural practices, mortality due to collision with electricity transmission lines. Their survival is also threatened by stray dogs which are known to attack the bustard’s eggs and young ones.  

 

Q2) In which national park of India is the Great Indian Bustard found?

The Great Indian Bustard is found mainly in Desert National Park in Rajasthan.

 

---

 

What’s in today’s article:

• About UNDP (Objective, Vision, Funding, etc.)
• News Summary (UNDP’s Programme, Financial Inclusion of ‘Safai Sathis’, What is the need?)

 

Why In News:

• The United Nations Development Programme (UNDP) is helping the people working in the waste segregation industry in India to move into formal economy, by helping them access government welfare programmes.

 

 About United Nations Development Programme (UNDP):

• The UNDP is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human development.
• UNDP was established in 1966 by the General Assembly of the United Nations.
• UNDP’s work is concentrated in three focus areas –
  • Sustainable development,
  • Democratic governance and peace building, and
  • Climate and disaster resilience.
• Mission & Vision –
  • UNDP’s mandate is to end poverty, build democratic governance, rule of law, and inclusive institutions.
  • It advocates for change, and connect countries to knowledge, experience and resources to help people build a better life.
• Funding – It is funded entirely by voluntary contributions from member nations.
• Headquarters – New York, USA

 

Reports published by UNDP:

• Human Development Index
• Sustainable Development Goals
• Gender Inequality Index 

 

News Summary:

• The United Nations Development Programme (UNDP) is helping the people working in the waste segregation industry in India to move into formal economy, by helping them access government welfare programmes.
• As part of the initiative, the United Nations Under-Secretary-General Usha Rao-Monari would distribute the `Jan Dhan’ account kits to waste segregation workers during her first visit to the country, on December 1.
• The opening of the `Jan Dhan’ accounts has been facilitated through the UNDP’s plastic waste management programme.
• The waste management promotes the collection, segregation, and recycling of all plastics to move towards a circular economy for the same.
• This is done at ‘Swachhta Kendra’ or material recovery facilities.
  • The plastic collected and processed so far has already crossed 1,38,000 metric tonnes.

 

Financial Inclusion of ‘Safai Sathis’:

• The programme run by UNDP aims to ensure the well-being and financial inclusion of the `Safai Sathis’ or waste-pickers, by linking them to the social protection schemes.
• According to the UN agency, a key objective of the programme is to help move the sector from informal to formal.
• The UNDP aims to do this by linking them to social protection schemes like the `Jan Dhan’ accounts, Aadhar cards, `Ayushman Bharat’, pension schemes, and scholarships for children, among others.

 

Why financial inclusion is the need of the hour?

• A baseline survey done by the UNDP earlier shows that the ‘Safai Sathis’ are employed mainly on the margins of the urban informal sector.
• Their low income and job security are compounded by the fact that nearly 70% come from socially- backward groups and over 60% have no formal education.
• More than 90% workers reported owning an Aadhar card but only a tiny subset have an income, caste, or occupation certificate.
• This thwarts any attempts at formalising their work and limits their access to government social security schemes.
• Less than 5% of those surveyed had any health insurance, indicating very high degrees of health-shock vulnerabilities.

What’s in today’s article:

• About CCUS
• India’s efforts towards promoting CCUS
• News Summary

 

Why In News:

• According to a NITI Aayog’s report on the policy framework of the Carbon Capture Utilisation and Storage (CCUS), CCUS has a critical role to play for the country to halve CO2 emissions by 2050.
• CCUS is a technology for decarbonising carbon dioxide (CO2) from high polluting sectors.

 

Carbon capture, utilisation, and storage (CCUS):

• About CCUS:
  • It is the process of capturing CO2 emissions and either using them to make things such as building materials (utilisation) or permanently storing them thousands of feet below the surface (storage).
• Need:
  • The Intergovernmental Panel on Climate Change (IPCC) in its Global Warming of 1.5 °C report highlights that achieving net-zero emissions by 2050 isn’t possible without ambitious mitigation actions like CCUS.
• Significance of CCUS:
  • Capturing CO2 helps reduce carbon emission intensity of industrial operations, while retaining the carbon neutrality (CO2 emissions = CO2 capture) of the production processes.
  • It is a critical component of meeting the global net-zero ambitions of the Paris Agreement.
• Advantages of CCUS:
  • Safe transportation: CO2 is an inert gas that is not flammable. Smaller amounts of compressed CO2 can be transported on trucks, while larger amounts are often transported by pipes.
  • Safe storage: The CO2 is stored within rock formations over half a mile underground in depleted oil or gas fields or saline formations.
  • Safe reuse: Captured carbon can be put to many uses, from the manufacture of industrial materials (concrete, chemicals, biofuels, plastic and foam) to using CO2 for oil extraction or waste clean-up in alkaline industries.
• Disadvantages of CCUS:
  • High cost of mechanisms used to implement CCUS: For example, carbon capture necessitates the creation of compounds capable of binding to CO2 in exhaust gas or the atmosphere, which is costly.
  • Less demand for recycled CO2: Converting CO2 for commercial use would provide economic value to this greenhouse gas. However, demand for CO2 is less than the vast amount of CO2 that must be removed from the atmosphere.

 

India’s efforts towards promoting CCUS:

• Department of Science and Technology (DST) aims to nurture the area of Carbon Capture, Utilisation, and Storage through emphasis on research and development and capacity building of both human resource as well as infrastructure.
• Mission Innovation Challenge on CCUS (IC3): DST-Department of Biotechnology (DBT) had jointly launched the mission in 2018, to enable near-zero CO2 emissions from power plants and carbon-intensive industries.
• Accelerating CCS Technologies (ACT): This initiative aims to facilitate R&D and innovation that can lead to development of safe and cost-effective CO2 capture, utilisation and storage (CCUS) technologies.
  • India has joined forces with France, Germany, Norway, Switzerland, The Netherlands, the UK, and the US, etc., to achieve these objectives. 

 

News Summary - Highlights of the report:

• Importance of CCUS for India
  • India’s per capita CO2 emissions were about 1.9 tonnes per annum, which was less than 40% of the global average and about one-fourth of that of China.
  • Industries such as steel, cement, oil, gas, petrochemicals, chemicals and fertilisers, have a critical role to play for the country to halve CO2 emissions by 2050.
  • Therefore, a sustainable solution for the decarbonisation of sectors that contribute to 70% of emission is needed.
  • CCUS has an important and critical role to play in it, especially for India to accomplish net-zero by 2070.
• Impact on economy
  • The CCUS technology would help in promoting the low carbon-hydrogen economy and in removal of the CO2 stock from the atmosphere.
  • CCUS could enable the production of clean products while utilising rich endowments of coal, reducing imports and thus leading to a self-reliant India economy.
  • There will be an impact on the economy if value-added products such as green methanol, green ammonia can be produced from this captured CO2.
  • CCUS also has an important role to play in enabling sunrise sectors such as coal gasification and the nascent hydrogen economy in India.
• Way forward
  • The key challenge would be to reduce the cost of the mechanisms to implement the technology.
  • To address this challenge, the focus should be on R&D, particularly on cutting edge technologies.
  • The key to a successful CCUS implementation in India was to enact a policy framework that supported the creation of sustainable and viable markets for CCUS projects. The policy should -
    • Establish early-stage financing and funding mechanisms for CCUS projects.
    • Promote the private sector through sufficient incentives.
    • Be carbon credits or incentives based, to promote the CCUS sector in India through tax and cash credits.
    • Over time (probably beyond 2050), the policy should transition to carbon taxes, to enable reaching India’s net zero goals by 2070.

What’s in today’s article:

• Central bank digital currency (CBDC) – About, India’s approach towards CBDC, rationale
• News Summary

 

Why In News:

• The Reserve Bank of India’s first pilot for a retail e-rupee, its version of the central bank digital currency (CBDC), will be launched on December 1.
• The pilot will cover select locations in a closed user group comprising participating customers and merchants.

 

Central bank digital currency (CBDC)

About

• CBDC is the legal tender issued by a central bank in a digital form.
  • The digital rupee (e-Rupee) is the digital currency launched by Reserve Bank of India.
• It is the same as a fiat currency and is exchangeable one-to-one with the fiat currency, only its form is different.

India’s approach to CBDC

• Budget 2022-23 announcements
  • In her 2022-23 Budget speech, the Finance Minister announced the launch of the Digital Rupee, the name of the CBDC in India, from 2022-23
    • The Reserve Bank of India (RBI) will issue these in 2022-23.
• Regulatory Framework
  • Currently, there is no regulation or any ban on the use of cryptocurrencies in the country.
  • The Indian government is expected to introduce the Crypto currency and Regulation of Official Digital Currency Bill.
    • It is expected to regulate the role of investment, transaction and use of private crypto currencies in the country, including working of CBDC.
• Launch of Digital Rupee
  • Based on the usage and the functions performed by the digital rupee and considering the different levels of accessibility RBI has demarcated the digital rupee into two broad categories: general purpose (retail) and wholesale.
  • From November 1, 2022, RBI launched its first pilot project to use digital rupee in the wholesale market for secondary trade in government securities (G-secs).
    • Wholesale CBDC has the potential to transform the settlement systems for financial transactions undertaken by banks in the government securities (G-Sec) segment, inter-bank market and capital market more efficient and secure in terms of operational costs, use of collateral and liquidity management.
  • From December 1, retail digital rupee (e-R) pilot will be launched.
    • In effect, the retail e-rupee will be an electronic version of cash, and will be primarily meant for retail transactions.
    • It will be potentially available for use by all — the private sector, non-financial consumers and businesses.
    • It will be distributed through intermediaries, i.e., banks.
    • Transactions can be both person to person (P2P) and person to merchant (P2M) using QR codes displayed at merchant’s locations.
    • It will not earn any interest and can be converted to other forms of money, like deposits with banks.

Why RBI is launching e-Rupee?

• The key motivations for exploring the issuance of CBDC include
  • Reduction in operational costs involved in physical cash management,
  • Fostering financial inclusion,
  • Bringing resilience, efficiency and innovation in the payments system.
• It will add efficiency to the settlement system and boost innovation in cross-border payments space.
• Introducing its own CBDC has been seen as a way to bridge the advantages and risks of digital currency.
  • Specially, concerns over money laundering, terror financing, tax evasion, etc. with private crypto currencies like Bitcoin, Ether, etc.
• Being interoperable with other payment systems, it will complement existing techniques like UPI, thus completing the mobile payments ecosystem.

News Summary:

• The RBI has announced that the retail digital rupee (e-R) pilot will launch on December 1 with four banks - State Bank of India, ICICI Bank, IDFC First Bank and Yes Bank.

Key highlights

• The e-R would be in the form of a digital token that represents legal tender. It would be issued in the same denominations that paper currency and coins are currently issued.
• Like in the case of paper currency, the digital rupee would be distributed through banks.
• Users must use a digital wallet through a participating bank and store it on their mobile phone or device.
• Payments to merchants can be made using QR codes displayed at merchant locations.
• The pilot will test the robustness of the entire process of digital rupee creation, distribution and retail usage in real time.

What’s in today’s article:

• News Summary

 

Why In News:

• The aviation and telecom departments will shortly roll out a plan to ensure safe flight operations around airports with 5G airwave infrastructure.
• This is being done after India’s aviation regulator flagged concerns about interference that 5G signals could cause, potentially posing a challenge to safe airline operations.

 

News Summary

• The Department of Telecommunications (DoT) is currently preparing an operational guideline to ensure safe flight operations around airports with 5G airwave infrastructure.
• The plan includes:
  • telecom companies setting up infrastructure powering 5G networks in the country away from the flight path around airports,
  • carrying low power signals in such areas and
  • a plan to upgrade the altimeter of all aircraft operating in the country by August 2023.

Concerns around 5G interference with flight operations

• Concerns in India
  • In September, the Indian Directorate General of Civil Aviation (DGCA) wrote to the telecom department flagging concerns over the likely interference of 5G C-Band spectrum with aircraft radio altimeters.
    • A radio altimeter is an instrument that provides direct height-above-terrain information to various aircraft systems.
    • These altimeters as well as a part of the 5G telecom services operate in the mid C-Band frequency range.
    • 5G terrestrial signals typically operate at a very heavy power level compared to flight altimeters. This increases the possibility of interference.
  • Earlier this year, the 6,000-pilot-strong Federation of Indian Pilots had also written to the Civil Aviation Ministry raising similar concerns.
• Similar concerns in US
  • So far, US aviation authorities have reported about 85 cases of 5G waves impacting flight operations near the airport.
  • In the US, an agreement between the Federal Aviation Administration (FAA) and the telecom operators resulted in a delay in rollout of 5G services in the C-Band near airports that were assessed to be difficult for pilots to make visual approaches.
    • Earlier this year, Air India had to cancel some of its flights to the US.
    • This was done amid concerns that the rollout of 5G mobile services in the US could potentially interfere with aircraft navigation systems.
    • Since then, the FAA has issued several directives to airlines to install certain filters or modify their equipment to ensure that 5G airwaves do not interfere with their navigation systems.
• Concerns raised by other industries
  • With the guard band between the 5G telecom and broadcast services narrowing sharply, broadcasters have cited multiple incidents of disruptions.
    • A guard band is a narrow frequency range that separates two ranges of wider frequency.
    • This ensures that simultaneously used communication channels do not experience interference, which would result in decreased quality for both transmissions.
  • They raised concerns over possible interference and potential outages once full-scale 5G services are launched across the country.

C-Band

• C-band refers to the portion of the electromagnetic spectrum allotted for satellite transmissions in the 4GHz to 8GHz frequency range.
• The C band is used for many satellite communications transmissions, some Wi-Fi devices, some cordless telephones, as well as some Radar and weather radar systems.
• For telecom service providers, the C-Band presents a sweet spot for rolling out 5G services, ensuring coverage as well as high bandwidth, resulting in faster internet speeds.
• For aircraft operations, the use of altimeters in this band ensures highly precise measurements of the plane’s altitude.