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(PRELIMS + MAINS FOCUS)

UPI Transactions crosses 2 billion mark 

Part of: GS Prelims and GS-III – Economy

In news

• Recently UPI transactions were in the news.
• According to the data released by the National Payments Corporation of India (NPCI), the total number of transactions conducted on BHIM-UPI crossed the 2 billion mark in a month in October 2020.

Key takeaways 

• UPI is currently the biggest among the NPCI operated systems. 
• Other systems include National Automated Clearing House (NACH), Immediate Payment Service (IMPS), Aadhaar enabled Payment System (AePS), Bharat Bill Payment System (BBPS), RuPay etc.
• Digital transactions were already increasing but the lockdown imposed due to Covid-19 provided a thrust
• Also, India’s digital payments industry is likely to grow from Rs. 2,153 trillion to Rs. 7,092 trillion by 2025.

Important value additions 

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 Payment and Settlement Systems Act, 2007.
• It is a “Not for Profit” Company under the provisions of Section 25 of Companies Act 1956 (now Section 8 of Companies Act 2013). 
• Objective: To provide infrastructure to the entire Banking system in India for physical as well as electronic payment and settlement systems.

Do you know? 

Challenges of the digital transactions

• Cybercrime. E.g. Malicious Software Cerberus
• Fraudulent claims, chargebacks, fake buyer accounts, promotion/coupon abuse, account takeover, identity theft, etc.

India’s manufacturing output shows the strongest growth 

Part of: GS Prelims and GS-III – Economy

In news

• As per the IHS Markit India Purchasing Managers’ Index (PMI), India’s manufacturing output showed the strongest growth in 13 years in October 2020.

• The Nomura India Business Resumption Index (NIBRI) has also shown improvement.

Key takeaways 

• Purchasing Managers’ Index (PMI) rose from 56.8 in September to 58.9 in October. 
• NIBRI improved to 82.4 in October, a rise of 2.1 points from 80.3 in September.
• NIBRI is the Japanese brokerage’s weekly tracker of the pace of normalisation of economic activity.
• Reasons: (1) Increase in Sales; (2) Rise in Export Orders; (3) Improvement in IIP

Important value additions 

Purchasing Managers’ Index

• PMI is an indicator of business activity – both in the manufacturing and services sectors.
• It is calculated separately for the manufacturing and services sectors. 
• A composite index is also constructed.
• The PMI summarizes whether market conditions as viewed by purchasing managers are expanding, neutral, or contracting.
• Purpose: To provide information about current and future business conditions to company decision makers, analysts, and investors.
• The PMI is usually released at the start of every month. 
• It is, therefore, considered a good leading indicator of economic activity.

Do you know? 

• PMI is compiled by IHS Markit for more than 40 economies worldwide. 
• IHS Markit is a global leader in information, analytics and solutions for the major industries and markets that drive economies worldwide.

Ganga Utsav 2020

Part of: GS Prelims and GS-I – Culture & GS-III – Environment

In news

• Recently, the Ganga Utsav 2020 has begun. 
• It celebrates the glory of the National river Ganga.

Key takeaways 

• The National Mission for Clean Ganga (NMCG) celebrates the festival every year.
• Aim: To promote stakeholder engagement and ensure public participation.
• It celebrates river Ganga through storytelling, dialogues with eminent personalities, displaying traditional art forms, dance and music performance, etc. 
• Ganga Task Force (GTF) also conducted an afforestation drive with National Cadet Corps (NCC) cadets and educational tour for youth.
• Mini Ganga Quest was also held which was designed to make youth and students aware of environmental issues and explain their role in conservation.

Important value additions 

River Ganga

• It is the longest river of India. 
• It is revered by Hindus as the most sacred river on earth.
• It originates in the Gangotri Glacier in the Himalayas as the Bhagirathi River.
• The Ganga river basin is one of the most fertile and densely populated areas of the world. 
• The Ganges River Dolphin, an endangered animal, specifically habitats this river.
• It ends its journey by emptying into the Bay of Bengal.
• Ganga was declared as the National River of India on 4th November 2008.

Initiatives for Good and Vigilant Governance launched

Part of: GS Prelims and GS-II – Governance

In news

• Recently, the Department of Administrative Reforms and Public Grievances (DARPG) has come up with new initiatives for good and vigilant governance on the last day of the Vigilance Awareness Week 2020.

Key takeaways 

• “Ideas Box on Good Governance Practices in a Pandemic” has been launched and operationalised both on the DARPG as well as on the MyGov platform.
• Social media tweets on the “Best Practices in e-governance” have been launched.
• Round table discussion on “Satark Bharat, Samriddh Bharat” (Vigilant India, Prosperous India) was held.

Important value additions 

Vigilance Awareness Week

• The Central Vigilance Commission (CVC) observes the Week every year during the week of Sardar Vallabhbhai Patel’s birthday (31st October).
• Objective: (1) To affirm India’s commitment to the promotion of integrity and probity in public life through citizen participation; (2) To reiterate Government’s resolve to continue the crusade against corruption.
• Theme for 2020: Satark Bharat, Samriddh Bharat

Central Vigilance Commission

• It is an independent statutory body. 
• It is only responsible to the Parliament.
• It is the apex vigilance institution monitoring all vigilance activity under the Central Government. 
• It advises various authorities in Central Government organisations in planning, executing, reviewing and reforming their vigilance work.
• It was recommended by K Santhanam Committee 
• The Parliament enacted the Central Vigilance Commission Act, 2003.
• It is composed of a Central Vigilance Commissioner (Chairperson) and not more than 2 Vigilance Commissioners (members).
• They are appointed by the President on the recommendations of a Committee consisting of the Prime Minister, the Minister of Home Affairs and the Leader of the Opposition in the House of the People.
• Tenure: 4 years from the date on which they enter their office or till they attain the age of 65 years, whichever is earlier.

Emergency Credit Line Guarantee Scheme extended 

Part of: GS Prelims and GS-II – Welfare schemes & GS-III – Industries

In news

• The Union Government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) by one month till 30th November, 2020, or till such time that an amount of Rs. 3 lakh crore is sanctioned under the Scheme, whichever is earlier.

Important value additions 

Emergency Credit Line Guarantee Scheme (ECLGS)

• The scheme was launched as part of the Aatmanirbhar Bharat Abhiyan package announced in May 2020. 
• Aim: To mitigate the distress caused by coronavirus-induced lockdown, by providing credit to different sectors. 

• Objective: To provide fully guaranteed and collateral free additional credit to MSMEs, business enterprises, MUDRA borrowers and individual loans for business purposes to the extent of 20% of their credit outstanding as on 29th February, 2020.
• Eligibility: Borrowers with credit outstanding up to Rs. 50 crore as on 29th February, 2020, and with an annual turnover of up to Rs. 250 crore.
• Tenure: Four years, including a moratorium of one year on principal repayment.

(MAINS FOCUS)

INTERNATIONAL/ SECURITY

Topic: General Studies 2,3:

• India and its neighborhood- relations. 
• Security challenges and their management in border areas 

The Importance of Gilgit-Baltistan

Context: On November 1, Pakistan Prime Minister Imran Khan announced that his government would give “provisional provincial status” to Gilgit-Baltistan region.

About Gilgit Baltistan (G-B)

• The region is claimed by India as part of the erstwhile princely state of Jammu & Kashmir as it existed in 1947 at its accession to India.
• However, post the 1947-48 war it is being administered by Pakistan.
• To G-B’s west is Afghanistan, to its south is Pakistan-occupied Kashmir (PoK), and to the east J&K

A Brief History about Gilgit Baltistan

• Gilgit had been leased to the British by Hari Singh in 1935 as GB was the frontiers of what was then the Soviet-British Great Game territory.
• The British returned G-B in August 1947 and Hari Singh sent his representative, Brigadier Ghansar Singh, as Governor, and Major William Alexander Brown to take charge of the Gilgit Scouts.
• On November 1 1947, after J&K ruler Hari Singh had signed the Instrument of Accession with India, and the Indian Army had landed in the Valley to drive out tribal invaders from Pakistan, there was a rebellion against Hari Singh in Gilgit.
• Gilgit Scouts mutinied against India under the leadership of its commander, Major William Alexander Brown who raised the Pakistani flag and subsequently brought G-B under Pakistani administrative control.
• Pakistan did not accept G-B’s accession although it took administrative control of the territory

• After India went to the UN and a series of resolutions were passed in the Security Council on the situation in Kashmir, Pakistan believed that neither G-B nor PoK should be annexed to Pakistan, as this could undermine the international case for a plebiscite in Kashmir.

• Pakistan also reckons that in the event a plebiscite ever takes place in Kashmir, votes in G-B will be important too.

What is the region’s current status?

• Though Pakistan, like India, links G-B’s fate to that of Kashmir, its administrative arrangements are different from those in PoK. 
• While PoK has its own Constitution that sets out its powers and their limits vis-à-vis Pakistan, G-B has been ruled mostly by executive fiat. Until 2009, the region was simply called Northern Areas.
• It got its present name only with the Gilgit-Baltistan (Empowerment and Self-Governance) Order, 2009, which replaced the Northern Areas Legislative Council with the Legislative Assembly.
• The NALC was an elected body, but had no more than an advisory role to the Pakistan government.
• Though there were demands in Pakistan to provide provisional provincial status to G-B since long time, many factors made a push towards providing this status now.

What do the people in G-B want?

• The people of G-B have been demanding for years that it be made a part of Pakistan, they do not have the same constitutional rights Pakistanis have.
• There is virtually no connect with India. 
• Some have in the past demanded a merger with PoK, but the people of G-B have no real connect with Kashmir either. They belong to several non-Kashmiri ethnicities, and speak various languages, none of these Kashmiri.
• A majority of the estimated 1.5 million G-B residents are Shias. There is anger against Pakistan for unleashing extremist sectarian militant groups that target Shias
• There is also discontent amongst G-B people over Pakistan dictating the use of their natural resources.
• But the predominant sentiment is that all these will improve once they are part of the Pakistani federation.
• There is a small movement for independence, but it has very little traction

Factors that caused Pakistan to change the status of G-B

• The plan to grant G-B provincial status gathered speed over the last one year.
• India Factor: The push might have come from India’s reassertion of its claims over G-B after the August 5, 2019 reorgansiation of Jammu & Kashmir
• Chinese Factor: There are also reports that the change is status is also linked to Chinese interests in the region, whose ambitious project of China Pakistan Economic Corridor (CEPC) passes through this region. This region provides Pakistan the only territorial frontier, and thus a land route, with China, where it meets the Xinjiang Autonomous Region. 
• Domestic Politics: The change in status also comes at a time when Pakistan government is facing protests from opposition parties. This reorganisation of G-B region provides the ruling party the much needed ammunition to bolster its credentials and divert the attention away from protests.

Consequences of the changed status

• It will further strengthen India’s argument for changing the status of Jammu & Kashmir and provides diplomatic heft in international forums like UNSC.
• Possibility of escalation of tensions between India and Pakistan, if tit-for-tat approach is adopted by both countries.
• It also signals the strengthening of China-Pakistan axis as Pakistan wants to assure China of security for its CPEC infrastructural project
• Kashmir conflict which was till now bilateral can turn into trilateral conflict especially since China is aggressively pushing for CPEC project which passes through G-B region.

Conclusion

India’s security agencies and diplomats must view this new development in a serious manner and take necessary steps to safeguard India’s territorial claims over G-B region.

Connecting the dots:

• Pakistan’s new map unveiled in August 2020 and its implication
• India-Nepal border dispute: Kalapani and Lipulekh

EDUCATION/ GOVERNANCE

Topic: General Studies 2,3:

• Issues relating to development and management of Social Sector/Services relating to Education, Human Resources. 
• Government policies and interventions for development in Education sectors and issues arising out of their design and implementation

A financial model for higher education

Context: National Education Policy 2020 that aims to achieve gross enrolment ratio of 50% in Higher Education by 2035.

Do You Know?

• Presently, India’s gross enrollment ratio (GER) in higher education is 28%. It lags behind the global average of 38% and behind China’s 51%.
• 23 Indian Institutes of Technology (IITs) will admit as many as 15,000 undergraduates this year, while just one state university in the United States (US), Arizona State University, admits 13,500 undergraduates each year.

Financial Concerns with Higher Education

• Inadequate Infrastructure: Achieving the targets in NEP 2020 calls for the scaling up of existing institutions as well as the creation of new premier ones.
• Need for Money: While the scaling-up of existing institutions and the creation of new institutions require additional budgetary allocations, running them well calls for money on a recurring basis. 
• Outdated Financing Model: NEP is trying to address this issue of funding by allocating a fixed percentage of GDP for higher education and providing granting administrative autonomy to these institutes. Currently, these institutions receive upwards of 80% of funds from the government.

What is needed is a structural overhaul and creation of a diversified financial model for our institutions. Some of the financial models that can be adopted are:

1. Restructuring of Tuition Fees – Use of Income Contingency Loans

• Tuition fees contribute up to a quarter of the income for the most universities in the US, Australia and Asia. 
• In the IITs, Tuition fees contributes to only 6-7%, since only a fraction (approximately one-third) of students pay the upper limit of tuition fees. Others pay a much lower amount, based on their social category and economic status.
• This contribution can be increased not only by increasing the highly subsidised tuition fees, but also by bringing all students into the fee-paying category. 
• This can be achieved by decoupling students and their families from the upfront financial barriers by offering them collateral-free and interest-free Income Contingency Loans (ICLs) through a centralised financial structure. 
• Australia’s Higher Education Loan Program (HELP) is a widely-praised ICL model that is managed by the Australian taxation office. The repayments are linked to the debtor’s income level and are collected directly by the Australian tax authorities. 
• ICLs are different from the education loans offered in the US that have caused massive student debt problems.

2. Research grants/equity investments in startups/technology transfer fees

• A third of the income could come from the research activities. Though research is primarily government-sponsored, universities in US and France raise up to a third of their research funds from non-government sources
• HEI like IITs could tap funds from the private sector, invest in and incubate research start-ups, and strengthen technology transfer and intellectual property licensing mechanisms. 
• Mechanisms such as Foundation of Innovative Technology Transfer (FITT) at IIT Delhi and Society for Innovation and Entrepreneurship (SINE) at IIT Bombay may facilitate institutional equity investment in deep-tech start-ups. 
• The recent launch of the world’s most affordable Covid-19 testing kit by IIT Delhi and the supply of over 4.5 million export-quality personal protective equipment by IIT Delhi start-ups are small demonstrations of the potential such investments by HEIs can generate. 

3. Endowment donations

• Harvard, Stanford and Massachusetts Institute of Technology (MIT) have pioneered the concept of endowments, now adopted by public universities across the world. 
• An endowment is an aggregation of assets invested by a college or university to support its educational mission in perpetuity. 
• An institution’s endowment actually comprises hundreds or thousands of individual endowments. 
• An endowment allows donors to transfer their private dollars to public purposes with the assurance that their gifts will serve these purposes for as long as the institution continues to exist. An endowment represents a compact between a donor and an institution.
• Endowments are raised not only from the alumni but also from industry, philanthropists and governments. 
• Last year, IIT Delhi launched an endowment fund with a target of raising $1 billion, that will provide a conservative investment income of ₹700 crore every year. 
• A successful endowment model will require the creation of fund-raising teams and investment policy changes to overcome bureaucratic hurdles.

Conclusion

Tuition fees, research grants, and endowment funds should contribute a third each to income of Higher Educational Institutions so as to increase their autonomy and hence their global ranking

Connecting the dots:

• Right to Education Act
• Operation Digital Board

(TEST YOUR KNOWLEDGE)

Model questions: (You can now post your answers in comment section)

Note: 

• Correct answers of today’s questions will be provided in next day’s DNA section. Kindly refer to it and update your answers. 
• Comments Up-voted by IASbaba are also the “correct answers”.

Q.1 Consider the following statements regarding River Ganga:

1. It originates as Gandak river from Gangotri glacier.
2. The Ganges River Dolphin is found in this river.

Which of the above is/are correct? 

1. 1 only 
2. 2 only 
3. Both 1 and 2 
4. Neither 1 nor 2 

Q.2 National Payments Corporation of India (NPCI) is an initiative of:

1. Reserve Bank of India
2. World Bank
3. Asian Infrastructure Investment Bank (AIIB)
4. Reliance Group

ANSWERS FOR 3rd November 2020 TEST YOUR KNOWLEDGE (TYK)

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