What’s in today’s article?

• Background
• Unique Urbanisation Pathway in India
• Primary Challenges of Indian Urbanisation
• Environmental Challenges and Climate Impact
• Social Inequality & Segregation
• Governance & Decentralisation Issues
• Conclusion

Background

• With October 31 recognized globally as World Cities Day, this year's theme is "Youth Climate Changemakers: Catalysing Local Action for Urban Sustainability,".
• It aims to bring attention to the pressing issues affecting urban centres worldwide, particularly in India.
• With over 40% of India’s population residing in urban areas across approximately 9,000 towns, Indian cities face unique challenges exacerbated by rapid urbanization, socio-economic inequalities, and climate threats.

Unique Urbanisation Pathway in India

• Unlike Western nations, where urbanization followed industrialization and economic growth, India's urban expansion is primarily "poverty-driven."
• Economic distress pushes rural populations to urban areas, often without adequate infrastructure or employment opportunities.
• Migration patterns highlight infrastructure gaps.
• During the COVID-19 pandemic, reverse migration underscored the lack of essential services for urban residents and strained rural areas unprepared for the returning population.

Primary Challenges of Indian Urbanisation

• Outdated Spatial Planning:
  • India's urban planning often lags behind current needs, with many plans focusing on capital growth rather than human-centric development.
  • Outmoded spatial plans fail to account for rising populations and housing demands.
• Deindustrialization and Employment:
  • Post-1980s deindustrialization in cities like Ahmedabad, Delhi, and Mumbai led to significant job losses, pushing displaced workers into peri-urban slums where nearly 40% of India's urban population now resides.
  • Employment remains mostly informal, with 90% of jobs lacking job security and adequate working conditions.

Environmental Challenges and Climate Impact

• Climate Vulnerabilities:
  • Indian cities, particularly in the National Capital Region (NCR), experience severe air pollution, urban flooding, and the "urban heat island" effect.
  • Among India’s ten most polluted cities, eight are located in the NCR, leading to substantial health risks and decreased quality of life.
• Urban Flooding and Extreme Heat:
  • The increase in impervious surfaces and poor drainage systems make Indian cities prone to urban flooding.
  • The dense construction exacerbates heat levels, significantly impacting public health and productivity.

Social Inequality & Segregation

• Growing Inequality:
  • Cities are witnessing widening socio-economic disparities, with luxury housing projects such as DLF's "The Dahlias" in Gurugram offering apartments starting at ₹100 crore, contrasting with millions living without basic shelter.
• Community Segregation:
  • Contrary to the notion that cities dilute social and religious differences, urban areas in India are becoming increasingly segregated along these lines, leading to community isolation and tensions.

Governance & Decentralisation Issues

• Limited Local Authority:
  • Despite the 74th Constitutional Amendment aiming for decentralized urban governance, most Indian cities lack control over urban planning and essential functions.
  • Only a few cities have implemented more than three of the 18 mandated functions outlined in the 12th Schedule.
• Funding Constraints:
  • Urban areas receive minimal financial support from intergovernmental transfers, with cities allocated only 0.5% of the GDP, limiting their capacity for sustainable development and infrastructure improvements.

Conclusion

• Indian cities face complex, interwoven challenges requiring coordinated national interventions and empowered local governance to create inclusive, resilient, and sustainable urban environments.
• Comprehensive solutions involving updated spatial planning, adequate resource allocation, and localized climate action are crucial to addressing these issues and ensuring a more equitable future for India’s urban population.

Q1. What is an Urban Heat Island?

An urban heat island (UHI) is a city or urban area that experiences higher temperatures than the surrounding rural areas. 

Q2. What is an Urban Sprawl?

Urban sprawl is defined as "the spreading of urban developments on undeveloped land near a more or less densely populated city".

News: What are the major challenges faced by Indian cities? | Explained

What’s in today’s article?

• Why in News?
• Rural Wages vs Economic Growth
• Factors Behind Stagnant Rural Wages
• Steps Taken to Address the Issue of Low Rural Wages
• Conclusion

Why in News?

• The Indian economy has shown impressive growth in recent years, yet rural wages remain stagnant, especially in real terms.
• Hence, there is the need to explore the dichotomy between macroeconomic growth and the subdued rise in rural wages, examining contributing factors and potential mitigation through government schemes.

Rural Wages vs Economic Growth:

• Economic growth overview:
  • India’s GDP grew at an average rate of 4.6% from 2019-20 to 2023-24, reaching 7.8% over the last three fiscal years (April-March).
  • Agricultural sector growth rates were also robust, averaging 4.2% and 3.6% for the same periods.
• Wage growth data:
  • The Labour Bureau compiles daily wage rate data for 25 agricultural and non-agricultural occupations, collected every month from 600 sample villages spread over 20 states.
  • From 2019 to 2024, rural wages grew by 5.2% annually in nominal terms; however, adjusted for inflation, the real growth was -0.4%.
  • Even in the current fiscal year, wage growth remains low, highlighting a disconnect between GDP growth and real wage gains.

Factors Behind Stagnant Rural Wages:

• Rising female labour force participation (LFPR):
  • The female LFPR has risen sharply, from 24.5% in 2018-19 to 41.7% in 2023-24, with rural female LFPR jumping to 47.6%.
  • According to the Economic Survey 2023-24, programs like Ujjwala, Har Ghar Jal, and Swachh Bharat have freed up time for rural women, enabling their entry into the workforce.
  • Higher workforce participation, especially among rural women, has led to a larger labour pool, exerting downward pressure on wages due to a supply-demand imbalance.
• Shift in labour demand:
  • Although more women are entering the labour force, most are finding employment in agriculture, not higher-paying industrial jobs.
  • Economic growth in India has leaned towards capital-intensive industries that require less labour, further limiting wage growth in rural areas.
  • With more workers in agriculture, where productivity per worker is already low, additional labour supply only depresses wages further.

Steps Taken to Address the Issue of Low Rural Wages:

• Income transfer schemes:
  • State initiatives: Various state governments have introduced income support schemes targeting women, amounting to around Rs 2 lakh crore annually.
  • Impact of transfers: Programs like Maharashtra’s Ladki Bahin Yojana provide significant financial support to women, supplementing their low wages and offering a buffer in challenging times.
• Central government schemes:
  • The Centre’s income transfer schemes, including
    • Rs 6,000-per-year aid to farmer households (PM-KISAN) and
    • the free-grain scheme (PM Garib Kalyan Anna Yojana [PMGKAY]),
• Also help mitigate low rural income levels.

Conclusion:

• Despite substantial economic growth, rural wage growth remains subdued, with real wages barely improving.
• While government interventions provide some relief, addressing the root causes of stagnant rural wages - such as limited labour demand in higher-paying industries and the oversupply of rural labour - is essential for achieving inclusive economic prosperity.

Q.1. What is the labour force participation rate (LFPR)?

The LFPR is the percentage of a country's working-age population that is either employed or actively looking for work. It's calculated by dividing the total number of people in the labour force by the total working-age population, and then multiplying by 100.

Q.2. What is Ladki Bahin Yojana of the Maharashtra government?

The "Ladki Bahin Yojana" is a scheme to provide financial assistance of ₹1,500 per month to women aged between 21 and 65 years, aiming to improve their economic independence, health, nutrition, and decision-making power within their families.

News: Explained: The paradox of stagnant rural wages

 What’s in today’s article?

• Why in News?
• What is Indian Cyber Crime Coordination Centre (I4C)?
• What are Digital Arrest Scams?
• ED files charge sheet in digital arrest scams

Why in News?

The Enforcement Directorate (ED) recently filed a prosecution complaint under the Prevention of Money Laundering Act (PMLA) against eight individuals involved in cyber scams. These accused allegedly defrauded people via fake IPOs and stock investments, primarily using social media platforms like WhatsApp, Instagram, and Telegram.

Also, the Indian Cyber Crime Coordination Centre (I4C) has issued a new advisory warning against digital arrests.

What is Indian Cybercrime Coordination Centre (I4C)?

• About
  • I4C is an initiative of the Ministry of Home Affairs to deal with cyber crime in the country in a coordinated and comprehensive manner.
  • I4C focuses on tackling all the issues related to Cybercrime for the citizens, which includes: 
    • improving coordination between various Law Enforcement Agencies and the stakeholders, 
    • driving change in India's overall capability to tackle Cybercrime.
  • The I4C was dedicated to the Nation in January 2020.
• Objectives of I4C
  • To act as a nodal point to curb Cybercrime in the country.
  • To strengthen the fight against Cybercrime committed against women and children.
  • Facilitate easy filing Cybercrime related complaints and identifying Cybercrime trends and patterns.
  • To act as an early warning system for Law Enforcement Agencies for proactive Cybercrime prevention and detection.
  • Awareness creation among public about preventing Cybercrime.
• Major initiatives
  • Launched www.cybercrime.gov.in - the National Cybercrime Reporting Portal (NCRP) which allows 24X7 reporting of all types of Cybercrime
  • The Citizen Financial Cyber Fraud Reporting and Management System has been launched for immediate reporting of financial cyber frauds
  • National Toll- free Helpline number ‘1930’ has been operationalized to provide citizen assistance in lodging online cyber complaints.
  • The National Cyber Forensic Laboratory (NCFL), a 'State of the Art’ facility has been set up to train and assist the State/UT Investigation Officers
• Massive Open Online Courses (MOOC) platform called ‘CyTrain’ portal " https://cytrain.ncrb.gov.in " has been developed. 
  • CyTrain portal helps in the capacity building of Police Officers/Judicial Officers through online courses on critical aspects of Cybercrime investigation, forensics and prosecution and also gives completion certificates.
• Launched CyberDost handle on various social media platforms to generate cyber awareness among citizens

What are Digital Arrest Scams?

• About
  • A digital arrest scam is a type of online fraud in which scammers deceive victims by impersonating law enforcement officials. 
  • These fraudsters falsely accuse victims of criminal activities, use intimidation tactics, and demand money under the pretense of legal consequences. 
  • Victims are pressured into making payments to avoid supposed arrests.
• Working
  • In this scam, perpetrators pretend to be officials from agencies like the CBI, Income Tax Department, or Customs. 
  • They initiate contact with victims through phone calls, then switch to video calls on platforms like WhatsApp or Skype to add a sense of legitimacy. 
  • Scammers use tactics like showing a police station set-up or threatening arrest warrants, accusing victims of financial or legal violations. 
  • They demand payments under the pretense of “clearing the victim's name” or as “security deposits” for investigations.
  • Once the money is transferred, the scammers disappear, leaving victims with financial losses.

ED files charge sheet in digital arrest scams

• About the news
  • Following PM Modi’s recent appeal for vigilance against the threat of “digital” arrests, investigative agencies have announced active measures to combat this growing form of cybercrime. 
  • The Enforcement Directorate (ED) recently submitted a charge sheet related to one such scam, while the I4C has issued a new advisory.
• PM Modi’s Warning on Digital Arrest Scams
  • In his October 'Mann Ki Baat' address, PM Modi alerted citizens about scammers posing as law enforcement, conducting 'digital arrests' to extort funds from victims. 
  • He advised people to "stop, think, and take action" to safeguard themselves.
• ED’s Investigation and Charge Sheet Filing
  • ED recently filed a prosecution complaint under the Prevention of Money Laundering Act (PMLA) against eight individuals involved in cyber scams. 
  • These accused allegedly defrauded people via fake IPOs and stock investments, primarily using social media platforms like WhatsApp, Instagram, and Telegram.
    • Known as 'pig-butchering' scams, stock market investment scams entice victims with promises of high returns.
    • They use fake websites and misleading WhatsApp groups that appear connected to reputable financial firms.
  • The ED detailed how fraudsters disguised themselves as officials from Customs or the CBI, falsely accusing victims of legal violations to intimidate them into transferring large sums. 
    • Funds from victims were funneled through "mule" accounts, converted to cryptocurrency, and transferred abroad. 
    • Key accused individuals recruited directors for shell companies and facilitated bank account openings, knowingly assisting in money laundering.
  • Victims were manipulated through “digital arrests” under the guise of a fake “fund regularisation process.”
• I4C Advisory to Citizens
  • I4C issued a public advisory warning against digital arrest scams. 
  • It reminded citizens that legitimate officials do not make demands over video calls and urged people to report suspicious activity via the national cybercrime helpline (1930) or the cybercrime portal.

Q.1. What is a digital arrest scam?

A digital arrest scam is an online fraud where scammers pose as law enforcement officials to intimidate victims and demand payments. They falsely accuse victims of crimes to extract funds.

Q.2. How can you protect yourself from digital arrest scams?

Stay alert to fake calls claiming legal trouble. Law enforcement will not ask for payments on video calls. Report any suspicious activity to the cybercrime helpline (1930) or cybercrime.gov.in.

News: Digital arrests: ED files charge sheet, I4C issues fresh advisory

What’s in today’s article?

• Why in News?
• Rise in the RBI's domestic gold holding
• Gold Kept in Bank of England
• RBI’s strategy to bring back its gold assets to India

Why in News?

The Reserve Bank of India (RBI) has brought back nearly 130 metric tonnes of gold owned by it and kept in safe custody of the Bank of England in the last two-and-a-half years.

This decision marks a shift in the RBI's approach to safeguarding its gold reserves, with a 60% increase in domestic gold holdings during this period.

Rise in the RBI's domestic gold holding

• As of September 2024, the RBI's domestic gold holding has increased to 510.46 metric tonnes, up from 295.82 metric tonnes in March 2022. 
• Presently, around 324 metric tonnes of the RBI's gold remains under the custodianship of the Bank of England, a reduction from 453.52 metric tonnes in March 2022.
• In value terms (USD), the proportion of gold in India's total foreign exchange reserves rose from 8.15% at the end of March 2024 to approximately 9.32% at the end of September 2024.

Gold Kept in Bank of England

• One of the world's largest gold vaults
• The Bank of England hosts one of the world's largest gold vaults, second only to the New York Federal Reserve. 
• It stores around 400,000 bars of gold, holding gold for many central banks worldwide. This facility incurs a cost for gold safekeeping.
• India’s gold in Bank of England
• The RBI continues to retain 324 tonnes of its gold reserves under the protection of the Bank of England and the Bank for International Settlements, which collectively hold a substantial portion of India's gold abroad. 
  • Around 20 tonnes are additionally managed through gold deposit schemes.
• Storing part of India’s gold in London provides the RBI with immediate access to the London bullion market, allowing for enhanced liquidity. 
• Historically, in 1991, India sent 47 tonnes of gold to the Bank of England during a balance of payments crisis to secure funds for repaying international creditors.

RBI’s strategy to bring back its gold assets to India

• Central Banks Buying Gold
  • Since the U.S. imposed sanctions on Russia in 2022 following the Ukraine invasion, central banks globally have been increasing their gold reserves as a hedge against inflation and to decrease reliance on the U.S. dollar. 
    • Since Russia’s invasion of Ukraine, India has purchased gold at a faster pace than any other G20 country, surpassing both Russia and China.
  • This trend, termed "de-dollarisation," aims to diversify away from the dollar amidst a surge in gold prices. That’s why central banks are buying gold.
• Significance of this strategy
  • Sign of a strong economy
    • In 1991, at the time of a severely difficult economic phase, RBI had to pledge some gold to raise funds. 
    • At that time, it was also remembered as a sign of a weak economy. 
    • Now, bringing back gold reflects the recovery and a major change in the strength of Indian economy.
  • Optimizing financial resources
    • Since RBI has gold deposits mostly held internationally, the decision to bring back some of it will save the cost of storage, which is being paid to foreign banks. 
  • Strategic significance
    • This is part of a broader strategy to make better use of the national asset in terms of worldwide instability.
    • Globally, central banks are increasingly investing in gold as a safe-haven asset, partly as a strategy to reduce reliance on the U.S. dollar. 
    • India’s decision to repatriate and store gold domestically aligns with this global trend and demonstrates a strong belief in the resilience of its economy.
  • Rise in safe-keeping capacity 
    • The RBI has been steadily repatriating gold from the Bank of England, citing improved domestic capacity for physical storage.
    • As per the RBI Governor, the increasing amount of gold held by the RBI within India as part of its reserve management strategy, emphasizing the importance of maintaining domestic storage capacity. 
    • As of October 25, 2024, India's total foreign exchange reserves have risen to $684.8 billion, sufficient to cover over 11.2 months of imports (as of June 2024).
  • Diversification
    • Increasing gold reserves allows India to diversify its foreign exchange holdings, reducing reliance on any single currency and mitigating risks from currency fluctuations and economic instability. 
    • Gold, as a stable global asset, provides a safe haven, balancing the reserves portfolio and shielding the economy from shocks affecting specific currencies. 
    • This diversification strengthens financial security and gives the government greater flexibility in economic management, bolstering the overall stability and resilience of the economy.
• Hedge Against Inflation
  • Gold acts as a hedge against inflation, retaining or appreciating in value when currencies lose purchasing power. 
  • By increasing gold reserves, a country protects its economy from inflation's negative effects, ensuring stability for long-term financial planning and investor confidence. 
  • Substantial gold reserves safeguard against currency devaluation, preserving national wealth amid economic uncertainties.
  • Conclusion
  • The RBI's recent transfer of gold from the UK marks a key step in strengthening India's economy. 
  • This move preserves national assets, prepares for future economic challenges, and aligns with global central banks’ recognition of gold’s role in ensuring long-term stability.

Q.1. Why did the RBI bring back gold from the Bank of England?

The RBI repatriated gold to strengthen India's economic resilience, reduce storage costs, and align with a global trend of de-dollarisation, using gold as a safe asset.

Q.2. How does holding more gold reserves benefit India’s economy?

Increased gold reserves diversify foreign exchange holdings, safeguard against inflation, and provide stability, making India’s economy less vulnerable to global currency fluctuations.

News: Times of India | Business Standard | Indian Express