Key recommendations: Ban on all forms of private cryptocurrencies. Impose a fine of up to Rs 25 crore and imprisonment of as much as 10 years for anyone dealing in them. RBI and the government may look at the introduction of an official digital currency in the country.

Establish a specific group by the department of economic affairs with participation by the RBI, department of financial services and the ministry of electronics and information technology (MeitY) for examining and developing an appropriate model of digital currency in India. The panel backed use of distributed ledger technology (DLT) or blockchain for selected areas. It has asked the department of economic affairs to take the necessary measures to facilitate the use of DLT in the financial field after identifying its uses.

It has also suggested the use of DLT to reduce compliance costs for know-your-customer (KYC) requirements. Data localisation requirements proposed in the draft Data Protection Bill may need to be applied carefully, including with respect to the storage of critical personal data so as to ensure that there is no adverse impact on Indian firms and Indian consumers who may stand to benefit from DLT-based services.

Implications: The recommendations, if accepted by the government, will be a blow to digital currency aspirants in India such as Facebook as well as exchanges currently operating in the country by circumventing Reserve Bank of India (RBI) norms by undertaking peer-to-peer trading.

Definition: Cryptocurrency has been defined as “any information or code or number or token not being part of any official digital currency, generated through cryptographic means or otherwise, providing a digital representation of value which is exchange with or without consideration, with the promise or representation of having inherent value in any business activity which may involve risk of loss or an expectation of profits or income, or functions as a store of value or a unit of account and includes its use in any financial transaction or investment, but not limited to, investment schemes.”

Why IMC proposed Ban on Cryptocurrency? All the cryptocurrencies have been created by non- sovereigns and are in this sense entirely private enterprises. There is no underlying intrinsic value of these cryptocurrencies back they lack all the attributes of a currency.

There is no fixed nominal value of these private cryptocurrencies i.e. neither act as any store of value nor they are a medium of exchange. Since their inceptions, cryptocurrencies have demonstrated extreme fluctuations in their prices.

These crytocurrencies cannot serve the purpose of a currency. The private cryptocurrencies are inconsistent with the essential functions of money/currency, hence private cryptocurrencies cannot replace fiat currencies. A review of global practices show that they have not been recognised as a LEGAL tender in any jurisdiction. Committee also recommends that all exchanges, people, traders and other financial system participants should be prohibited from dealing with cryptocurrencies.

Theme for 2019– Promotion and Consolidation of Peace through Respect for International Law. Issues raised by India at NAM Meet included- Climate change, Digital Technologies and Terrorism.

Suggestions by India: Non-Aligned Movement (NAM) needs to be re-examined and revise its methodology. The grouping needs to undertake a new journey.

About NAM: Founded in 1961 in Belgrade. It was created by the heads of Yugoslavia, India, Egypt, Ghana and Indonesia. The Non-Aligned Movement was formed during the Cold War as an organization of States that did not seek to formally align themselves with either the United States or the Soviet Union, but sought to remain independent or neutral. The movement represented the interests and priorities of developing countries. The Movement has its origin in the Asia-Africa Conference held in Bandung, Indonesia in 1955.

Key features of the NAM policy: The policy of non-alignment was based on the five principles of Panchasheel, which directed international conduct. These principles which were envisaged and formulated in 1954, were mutual respect for each other’s territorial integrity and sovereignty; non interference in each other’s military and internal affairs; mutual non aggression; equality and mutual benefit and finally, peaceful coexistence and economic cooperation The policy of non-alignment meant the acceptance of the inevitability of warbut on the conviction that it could be avoided.

The non-aligned movement emerged from India’s initiative for formulating an independent foreign policy. This independent foreign policy was based on a solid moral and sound political foundation. The non-alignment was a strategy designed to maximise newly independent India’s gainsfrom the world system. Nonalignment did not mean to choose to become a hermit kingdom.

How has NAM benefited India? NAM played an important role during the Cold War years in furthering many of the causes that India advocated: Decolonisation, end to apartheid, global nuclear disarmament, ushering in of new international economic and information orders.

NAM enabled India and many newly born countries in 1950’s and 1960’s their sovereignty and alleviated the fears of neo-colonialism. Soft-Power Leadership:NAM made India a leader for many countries who didn’t want to ally with the then global powers USA or USSR. India became a soft-power leader which still holds good till date. Balanced friendship:India’s non-alignment gave her the opportunity to get the best of both the global superpowers of the time in terms of aid, military support etc. This was in line with her objectives of national development.

Why NAM’s authority is said to be slowly eroding? The end of cold war lead to unipolar world and now tending towards multi-polarity. The NAM is now reached irrelevance. NAM could not push for reforms in the global bodies like UN, IMF, WTO. Inability to find solution to the West-Asian crisis. Withdrawal of one of the founder members- Egypt, after the Arab Spring. Most of the members are economically weak; hence they have no say in world politics or economy.

With this, the focus has shifted back on past “bilateral agreements”, including the 1972 Simla Agreement.

India’s response: India has reiterated its longstanding position that there is no room for mediation in Kashmir or on any other India-Pakistan issue and that all outstanding matters between the two countries would be resolved through bilateral dialogue — but only when Pakistan ends cross-border terrorism in India.

What is Simla Agreement and why was it signed? The Simla Agreement was signed by Prime Minister Indira Gandhi and Pakistani President Zulfikar Ali Bhutto on 2 July 1972, following a full-blown war between India and Pakistan in 1971. The Simla Agreement was “much more than a peace treaty seeking to reverse the consequences of the 1971 war (i.e. to bring about withdrawals of troops and an exchange of PoWs).” It was a comprehensive blue print for good neighbourly relations between India and Pakistan.

Under the Simla Agreement both countries undertook to abjure conflict and confrontation which had marred relations in the past, and to work towards the establishment of durable peace, friendship and cooperation. The two countries not only agreed to put an end to “conflict and confrontation” but also work for the “promotion of a friendly and harmonious relationship and the establishment of durable peace in the sub-continent, so that both countries may henceforth devote their resources and energies to the pressing talk of advancing the welfare of their peoples.”

How was this to be achieved? In order to achieve this objective, both the governments agreed that that the principles and purposes of the Charter of the United Nations would govern bilateral relations and differences would be resolved by “peaceful means through bilateral negotiations or by any other peaceful means mutually agreed upon between them.”

Regarding Jammu and Kashmir, the two sides had agreed that the line of control “resulting from the cease-fire of December 17, 1971 shall be respected by both sides without prejudice to the recognized position of either side. Neither side shall seek to alter it unilaterally, irrespective of mutual differences and legal interpretations. Both sides further undertake to refrain from the threat or the use of force in violation of this Line.”

Both governments had also agreed that their respective Heads would meet again at a “mutually convenient time in the future the representatives of the two sides will meet to discuss further the modalities and arrangements for the establishment of durable peace and normalization of relations, including the questions of repatriation of prisoners of war and civilian internees, a final settlement of Jammu and Kashmir and the resumption of diplomatic relations.”

India had three primary objectives at Shimla: First, a lasting solution to the Kashmir issue or, failing that, an agreement that would constrain Pakistan from involving third parties in discussions about the future of Kashmir. Second, it was hoped that the Agreement would allow for a new beginning in relations with Pakistan based upon Pakistan’s acceptance of the new balance of power. Third, it left open the possibility of achieving both these objectives without pushing Pakistan to the wall and creating a revanchist anti-India regime.

Background: Kala-azar is endemic to the Indian subcontinent in 119 districts in four countries (Bangladesh, Bhutan, India and Nepal).

This disease is the second-largest parasitic killer in the world. Elimination is defined as reducing the annual incidence of Kala Azar (KA) to less than 1 case per 10,000 people at the sub-district level.

Kala-azar: What is it? Visceral leishmaniasis (VL), also known as kala-azar, black fever, and Dumdum fever, is the most severe form of leishmaniasis and, without proper diagnosis and treatment, is associated with high fatality.

Spread: Caused by protozoan parasites of the Leishmania genus, migrates to the internal organs such as the liver, spleen (hence “visceral”), and bone marrow. Signs and symptoms include fever, weight loss, fatigue, anemia, and substantial swelling of the liver and spleen.

This bulge in the working-age population is going to last till 2055, or 37 years from its beginning.

Significance: This transition happens largely because of a decrease in the total fertility rate (TFR, which is the number of births per woman) after the increase in life expectancy gets stabilised.

Many Asian economies — Japan, China, South Korea — were able to use this ‘demographic dividend’, defined by the United Nations Population Fund (UNFPA) as the growth potential that results from shifts in a population’s age structure.

What does the data say about India’s TFR? The government’s Sample Registration System in 22 states shows that TFR for India declined to 2.2 in 2017 after being stable at 2.3 between 2013 and 2016. TFR indicates the average number of children expected to be born to a woman during her reproductive span of 15-49 years.

How does TFR vary between urban and rural areas? The total fertility rate has more than halved in both urban and rural areas, falling even below the replacement level in the former where it is 1.7, down from 4.1 in 1971. In rural areas, TFR has fallen from 5.4 to 2.4 during the same period. For rural areas, it varies from 1.6 in Delhi and Tamil Nadu to 3.3 in Bihar. For urban areas, the variation is from 1.1 in Himachal Pradesh to 2.4 in Uttar Pradesh and Bihar. Of the 22 states, only six have a TFR of 2 or more in urban areas. There are 10 states where TFR is below 2 in rural regions.

How does fertility vary between age groups? The 25-29 age is the most fertile, except in Bengal, Chhattisgarh, Andhra Pradesh and Maharashtra, where it peaked between 20 and 24. Only J&K hits the peak after 30.

Why is TFR falling? Higher education, increased mobility, late marriage, financially independent women and overall prosperity are all contributing to a falling TFR. It goes below 2 in both urban and rural areas, where girls complete schooling and reduces further as they pass college. Bihar, with the highest TFR of 3.2, had the maximum percentage of illiterate women at 26.8%, while Kerala, where the literacy rate among women is 99.3%, had among the lowest fertility rates. As more cities come up, people move for jobs and employment tenure gets shorter, TFR may fall further.

What does this mean for policymakers? India has entered a 37-year period of demographic dividend, which could spell faster economic growth and higher productivity. As such, the government needs to engineer its policies to harness the opportunity.

It must also formulate policies to take care of higher medical costs as the population ages and productivity shrinks. As more people live away from their parents, India will also need to have an affordable social security system that provides pension to the elderly and takes care of their daily needs and medical expenses.

What does Data Localization mean? Data localization is the act of storing data on any device that is physically present within the borders of a specific country where the data was generated.

Why data localization is necessary for India? For securing citizen’s data, data privacy, data sovereignty, national security, and economic development of the country. Recommendations by the RBI, the committee of experts led by Justice BN Srikrishna, the draft ecommerce policy and the draft report of the cloud policy panel show signs of data localisation.

The extensive data collection by technology companies, has allowed them to process and monetize Indian users’ data outside the country. Therefore, to curtail the perils of unregulated and arbitrary use of personal data, data localization is necessary.

Digital technologies like machine learning (ML), artificial intelligence (AI) and Internet of Things (IoT) can generate tremendous value out of various data. It can turn disastrous if not contained within certain boundaries. With the advent of cloud computing, Indian users’ data is outside the country’s boundaries, leading to a conflict of jurisdiction in case of any dispute. Data localization is an opportunity for Indian technology companies to evolve an outlook from services to products. International companies will also be looking at the Indian market, and this will benefit the growth of the local ecosystem.

More data centres in India could mean new, power-hungry customers for India’s renewable energy market. That means Data localisation could boost India’s renewable energy.

Policies that imply data localization: The Srikrishna Committee wants to localise data for law enforcement to have easy access to data, to prevent foreign surveillance, to build an artificial intelligence ecosystem in India, and because undersea cables through which data transfers take place are vulnerable to attacks. Reserve Bank of India has also imposed a hard data localisation mandate on payment systems providers to store payment systems data only in India.

Barring limited exceptions, telecom service providers are not allowed to transfer user information and accounting information outside India. Goals set in the Draft National Digital Communications Policy 2018, and the Guidelines for Government Departments for Contractual Terms related to Cloud Storage 2017, draft e-commerce policy and the draft report of the cloud policy panel show signs of data localization.

Concerns / Challenges: Several of the recommendations in including the draft e-commerce policy, falter on a key ground like they gloss over the negative economic impact of data localization. This approach exhibits lack of evidence-based policy making.

Having data in India does not mean that domestic companies will be able to access this data. Localization might aid the growth of the data centre and the cloud computing industry in India, but as matter of wider public policy, such an approach is extremely myopic. Mandating localization is less of a solution for data protection and might be less relevant to promote e-commerce.

Given the comparative trade advantages enjoyed by one section of Indian industry in this context, mandating a strict data localization regime could be perceived as a restrictive trade barrier and spur retaliatory measures. There is a possible rise in prices of foreign cloud computing services in case of a data localisation, and its impact on MSMEs as well as start-ups relying on these services.

The possibility of triggering a vicious cycle of data localisation requirements by other countries as a response to India’s possible data localisation will be detrimental for the global data economy. Growth will be restricted if data cannot be aggregated internationally. Infrastructure in India for efficient data collection and management is lacking.

Need of the hour: There is an urgent need to have an integrated, long-term strategy for policy creation for data localisation. Data localisation needs to integrate a wide range of social, political and economic perspectives.

Creating an opportunity for local data centres all over the country. Devising an optimal regulatory and legislative framework for data processors and data centres operating in the country. Adequate infrastructure in terms of energy, real estate, and internet connectivity also needs to be made available for India to become a global hub for data centres.

Adequate attention needs to be given to the interests of India’s Information Technology Enabled Services (ITeS) and Business Process Outsourcing (BPO) industries, which are thriving on cross border data flow.

Human Centres Design and Computing Group has developed JATAN: Virtual Museum software which is used for creating the digital collections in various museums and digital archival tools that are used in background for managing the National Portal and Digital Repository for Indian Museums.

Chrysomallon squamiferum: What is it? It is a scaly- foot snail found at only three spots in the Indian Ocean. Why in News? It has become the first species to be officially declared threatened due to deep-sea mining.

Key facts: Chrysomallon squamiferum is found at three hydrothermal vents in the Indian Ocean, east of Madagascar. It was added by the International Union for Conservation of Nature (IUCN) to its updated Red List of Endangered Species on July 18, 2019.

Context: As part of the Finance Bill introduced in Parliament, the Centre had proposed amendments to the Securities and Exchange Board of India Act, 1992 that were seen as affecting SEBI’s financial autonomy.

What’s the issue? The amendments required that after 25% of its surplus cash in any year is transferred to its reserve fund, SEBI will have to transfer the remaining 75% to the government.

It was felt that the Centre’s decision to suck out SEBI’s surplus funds will affect its autonomy. Therefore, SEBI asked the centre to reconsider its decision. But, the government has rejected the plea, thus paving the way for further conflict.

Analysis: Prima facie, there seems to be very little rationale in the government’s decision to confiscate funds from the chief markets regulator.

For one, it is highly unlikely that the quantum of funds that the government is likely to receive from SEBI will make much of a difference to the government’s overall fiscal situation. In fact, the amendment seek to increase control over the regulator rather than by financial considerations. This is particularly so given that the recent amendments require SEBI to seek approval from the government to go ahead with its capital expenditure plans.

Concerns: A regulatory agency that is at the government’s mercy to run its financial and administrative operations cannot be expected to be independent.

The lack of financial autonomy can affect SEBI’s plans to improve the quality of its operations by investing in new technologies and other requirements to upgrade market infrastructure. This can affect the health of India’s financial markets in the long run.

What needs to be done? Regulatory agencies such as SEBI need to be given full powers over their assets and be made accountable to Parliament. Stripping them of their powers by subsuming them under the wings of the government will affect their credibility.