General Studies 3
- Inclusive growth and issues arising from it; Banking
General studies 2
- Government policies and interventions for development in various sectors and issues arising out of their design and implementation; Governance
A Cashless India
Cashless Economy: A cashless economy is a system where flow of cash or physical currency is non-existent and all monetary transactions are done electronically via internet enabled banking or wallets, and debit or credit cards, at most abolishing or at times reducing physical presence between two transacting parties.
Constituents of Cashless Transactions: Purchases, bill & utility payments and clearances or transfers
Benefits of a cashless economy for India—
- Increase in tax compliance and decrease in money laundering and black money transactions, as more and more enterprises begin to integrate digital payments into their business
- Reduction in money idling
- Reduced cost of minting currency
- Reduced Operation Cost for banks for ATMs, staffs, computers, logistics etc.
And, if a full transition to a digital payments economy happens in the right manner, it will rebuild the reputation of the Indian legal system as being consistent and predictable
Statistical & Policy importance:
- Much accurate data shall improve GDP, GNP calculation
- Better policy & planning by monitoring consumption and expenditure patterns
- Less use of paper, plastic, metals through decreased use of forms, documentations, minting, cheques, receipts etc.
- Lesser movement of individual and cash means lesser fuel consumption
- Reduced transaction time
- Shortened queues
- No cash-flow worries during holidays or strikes
- Safety of an individual— minimal cash handling and thus, lesser crimes
Social Benefits: Schemes like DBT ensures no leakage and disregards corruption
But, of all the transactions in Indian economy, cashless transaction accounts to only 5% –
- Lack of universal banking
- Infrastructure shortage like PoS terminals at shops in small towns and villages
- Illiteracy and digital illiteracy
- Lesser internet penetration
- Aversion to electronic transaction due to of fear of Cyber fraud etc.
Launch of the Unified Payment Interface (UPI)
- More than 650 million debit cards in circulation in the country today
- In 2015, the Reserve Bank of India reported a 63% increase in the use of debit cards at point of sales (PoS) terminals
- With an estimated 30 million retail merchants in the country, there are just 1.2 million PoS machines in operation
So, which one is the real bottleneck— Consumers or Retailers?
The real bottleneck is the merchants who are either unwilling or unable to accept payments in any form other than cash.
What should be the correct strategy then: Shifting the focus from customers to the merchants and on bringing the merchants on board.
Woes of the Merchants:
- With an already thin margin, they are reluctant to share their meagre profits with the card company (even though they recognize that accepting card payments could boost the volumes of their sales) (merchants (and not customers) shoulder the cost of the transaction. Each time a customer swipes his card to purchase a product, the merchant pays a percentage of the sale (the Merchant Discount Rate or MDR) to the card company)
- High price of a PoS machine and thus, the total cost to the merchant particularly for those who deal in low-value, high-volume products could be very high
Way Ahead: Need to devise solutions that offer cheaper PoS machines and charge lower transaction fees
Implementation of UPI in a correct manner—
- Its deep integration with the Aadhaar authentication framework should be acknowledged and should be devised in a way that it becomes possible to adapt a smartphone equipped with an iris camera to function as a PoS terminal (Work of card-based PoS machine- scan the information stored on the chip embedded in the card, compare it against the records maintained by the issuer bank and confirm that you are who you say you are) Smartphones that can biometrically authenticate you against the Aadhaar database will be able to do a good job at this—and, at the same time, eliminate the risk of cloned cards and identity fraud.
- With the authentication of the purchaser, UPI allows the merchant to directly “pull” the sum owed from out of the customer’s bank account and credit it to the merchant’s account. Given UPI’s relatively low transaction charges, even vendors who operate with the narrowest of margins will not object to coming on board.
No solution is a perfect solution and with time and efforts, few established regulations and widespread adoption among the merchant community, consumers will willingly change the way they shop leading the UPI mechanism to become a norm.
Connecting the Dots:
- Does there exist a direct correlation between a developed economy and a cashless economy? Justify your stand
General Studies 3
- Conservation, environmental pollution and degradation, environmental impact assessment.
- Inclusive growth and issues arising from it.
General Studies 2
- Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
NGT and implementation of Biodiversity Act, 2002
In news: A plea filed with NGT which alleges that various States and union territories had ‘failed’ to pay attention to the unique biodiversity of the country.
This article deals with:
- Environment vs. Development debate
- NGT vs. Government
- Degradation of Biodiversity
- Misuse by government authorities or concerned departments
- Poor implementation of Biological Diversity Act, 2002 and Biological Diversity Rules, 2004
- The Biological Diversity Act 2002 aims at preserving biological diversity in India.
- The Act provides mechanism for equitable sharing of benefits arising out of the use of traditional biological resources and knowledge.
- It seeks to set up Biodiversity Management Committees (BMCs) at the local level in every state under Section 41 of the Act. BMCs promote conservation, sustainable use and documentation of biological diversity.
- There is also a People’s Biodiversity Register (PBR) which records the diversity of flora and fauna.
- RTI: 15 states which revealed the status of implementation of the act showed that together these states have 61,000 panchayats and municipalities but only 1400 PBRs have been set up.
India is facing massive biodiversity loss
- On an average, 333 acres of forest are legally diverted under Forest (Conservation) Act, 1980, each day.
- This does not include forests which are illegally felled or encroached.
- For construction of Amravati, Andhra Pradesh’s state capital, 130 sq.km of forest is being diverted.
- The Himalayas have become world’s mountain range with most number of dams.
- SC has called for ‘species best interest standard’– completely new standards for endangered species
- It includes the most threatened species like the Great Indian Bustard (GIB), the Bengal Florican, Manipur Brow-antlered deer, dugong and wild buffalo.
- Yet, in 2015, one rhinoceros was killed almost every two weeks in the Kaziranga National Park.
- About 30 or less genetically pure wild buffaloes exist in central India.
- Great Indian Bustards are only now 150 in number
Thus, India is in the midst of an unacknowledged biodiversity crisis. But, it is ironic that Biodiversity Act is the most neglected of India’s environmental laws as well as one of the least implemented.
- The government’s approach has been with apathy.
- There is very limited judicial pronouncement and interpretation of environmental laws.
- Action by civil society is not much visible.
- Most of the Indian Forest Service Officers don’t consider biodiversity as a lively area and desire for a more ‘mainstream’ post.
Scope of the act
- The act has immense potential to safeguard India’s threatened biodiversity.
- It provides for both centralised and decentralised institutional mechanisms for conservation and sustainable use of biodiversity.
- The National Biodiversity Authority at the apex level, State Biodiversity Board and BMC at the local level.
- Thus, it can be a potent tool in helping to conserve wildlife and wildlife habitat.
- However, the problem is not at the constitution of biodiversity authorities at central or state level but at the BMC which has to perform diverse and critical functions.
Violations and opacity in Environment Impact Assessments (EIA)
- The Biodiversity act mandates impact assessment studies for activities like construction of dams, mining sites or diversion of land, which are likely to have an adverse impact on biodiversity, irrespective of the nature and scale of the proposed project.
- Yet, many projects in ecologically sensitive areas are able to circumvent the EIA process.
- It has been observed that either EIAs are fraudulent or they are below the threshold limit.
- A riverine area was proposed for the construction of a dam.
- The Monpa community of Tawang district struggled for three years to prove that it is one of the two wintering sites of the black-necked crane, a protected species held sacred by Buddhists.
- The environmental consultant had deliberately avoided a reference to the species.
- A series of hydropower projects are coming up in Himachal Pradesh.
- The tribals of Kinnaur are struggling to protect the last remaining chilgoza (pine nut) trees from being lost in these development projects.
- Forest Department records do not mention the significant role the tree species plays in providing livelihood security to people.
- The Lakhwar-Vyasi hydroelectric project is almost the size of the Tehri hydroelectric project. (1000 MW)
- It means that an EIA is necessary for this project as it will have huge impact on land, people and biodiversity. One of the major impact will be stemming the flow of more than 50 km of the Yamuna River.
- However, an EIA is exempted here because: the project was proposed in 1987 before the EIA Act of 2006!
Himalayas and the Western Ghats:
- There are a series of dams existing and coming up in these areas.
- They can have an adverse impact on aquatic biodiversity.
- Hence, new projects should be carried out after EIA is done.
- However, the EIA law requires that only projects above 25 MW should undergo EIA studies and thus, most mini-hydel power projects in India are of 24.99 MW capacity!
In an attempt to circumvent such laws, the cumulative impact of these projects on India’s biodiversity becomes substantial, at times irreversible.
Conclusion- Strengthening PBR
- PBR records biodiversity that comes under the BMC jurisdiction.
- Hence, it can be an effective tool to counter false and misleading statements given in forest diversion proposals and EIA reports.
- Also, it can help a community present the facts before the decision maker to highlight the ‘real value of the ecological entity proposed to be ‘sacrificed’.
- They can save areas from being ‘valued’ based on rapid assessment done by institutions of questionable integrity and methodology or project proponents, whose goals are only to take projects through.
The rationale of anthropocentrism, i.e. protecting the biodiversity for present and future generation should not be the sole reason. There exists moral, legal and ethical rights to not destroy something not created by human beings.
Connecting the dots:
- The real protection of biodiversity takes place at local level. Examine why India should implement Biodiversity Act, 2002 to balance its economic development with ecological protection.
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