Hindu Notes from General Studies-02

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Crypto currency panel for ban on private digital currencies, jail time of up to 10 years

News

• The committee set up to look into the legality of cryptocurrencies and blockchain has submitted its report to the Finance Ministry and recommended that private cryptocurrencies be banned completely in India.

Beyond News

• It has also drafted a law, the ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’, which mandates a fine and imprisonment of up to 10 years for offences. The committee, said the government should keep an open mind on the potential issuance of cryptocurrencies by the Reserve Bank of India.
• The government had constituted an Inter-Ministerial Committee on November 2, 2017.
• The committee notes with serious concern mushrooming of cryptocurrencies almost invariably issued abroad and numerous people in India investing in these, the report said. All these cryptocurrencies have been created by non-sovereigns.
• The report went on to highlight the fact that cryptocurrencies do not have any intrinsic value of their own and lack any of the attributes of a currency. That is, they neither act as a store of value nor are they a medium of exchange in themselves.
• The Committee, however, leaves the door open for the central bank issued cryptocurrencies, adding that it endorsed the RBI’s stance of banning any sort of interface of cryptocurrencies with the banking system in India.
• The Committee recommends that all private cryptocurrencies, except any cryptocurrency issued by the state, be banned in India, the report said. The Committee endorses the stand taken by the RBI to eliminate the interface of institutions regulated by the RBI from cryptocurrencies.
• In light of this, it recommended that the government constitute a committee under the Department of Economic Affairs and the participation of the RBI, Ministry of Electronics and Information Technology (MEITY), and the Department of Financial Services to further look into the matter.
• The draft law says that anybody who mines, generates, holds, sells, deals in, transfers, disposes of or issues cryptocurrencies with will face a fine and/or jail time of between 1 and 10 years. The fine has been set at the either three times the loss or harm caused by a person, or three times the gain made by the person, whichever is higher.

UN climate envoy meets Union Environment and Forests Minister

News

• The United Nations Special Envoy on Climate Change, Luis Alfonso de Alba, met Union Environment and Forests Minister and discussed India’s initiatives to meet its climate commitments.

Beyond News

• Ahead of the United Nations Climate Summit in New York, United Nations Special Envoy on Climate Change, appointed by UN Secretary-General Antonio Guterres as his climate envoy, is visiting several countries and urging leaders and businessmen to do more to ensure that global warming does not exceed 1.5 degrees Celsius.
• This implies countries enhancing their nationally determined contributions by 2020, in line with reducing greenhouse gas emissions by 45% over the next decade, and to net zero emissions by 2050, a UN statement noted.
• India had created 80,000 MW of renewable power and set a target of achieving 175,000 MW by 2022; reduced energy intensity by 21%, was increasing forest cover and that the distribution of 70 million gas cylinders under the Ujjwala scheme had helped save trees, reduce pollution and improve health.
• The UN also announced a ‘Clean Air Initiative’ that calls on governments to achieve air quality that is safe for citizens and to align climate change and air pollution policies by 2030.
• The Summit will bring together governments, the private sector, civil society, local authorities and other international organisations to develop ambitious solutions in six areas: a global transition to renewable energy; sustainable and resilient infrastructures and cities; sustainable agriculture and management of forests and oceans; resilience and adaptation to climate impacts; and alignment of public and private finance with a net zero economy.

Hindu Notes from General Studies-03

Indian organisations lost ₹12.8 crore to data breaches

News

• Data breaches cost organisations in India about ₹12.8 crore on average between July 2018 and April 2019, according to a report.

Findings

• The global average total cost of data breach was USD 3.92 million (about ₹27.03 crore) with the average size of the breach being 25,575 records.
• In India, the per capita cost per lost or stolen record was at ₹5,019, compared USD 150 per record globally. On an average, 35,636 records were compromised in a data breach in India that ranked 15th in terms of total cost of breach.
• For the report, interviewed over 500 organisations that have experienced a breach between July 2018 and April 2019.
• The analysis takes into account cost factors from legal an regulatory activities to loss of brand equity, customer turnover and the drain on employee productivity.
• Organisations need to significantly invest in three core areas when it comes to cyber security risk assessment based on business objectives, cognitive threat management and ensuring digital trust.
• The report said major causes of data breaches in India comprised malicious or criminal attacks (51%), system glitch (27%) and human error (22%).
• The mean time to identify the data breach has also increased to 221 days from 188 days, while the mean time to contain such breaches has decreased to 77 days from 78 days.
• According to the report, data breaches in the U.S. are vastly more expensive costing USD 8.19 million (about ₹56.46 crore), or more than double the average for worldwide companies in the study. Costs for data breaches in the U.S. increased by 130% over the past 14 years of the study, up from USD 3.54 million in the 2006 study.
• Malicious data breaches cost companies in the study USD 4.45 million on average. This is over USD 1 million more than those originating from accidental causes such as system glitch and human error, the report said.
• Inadvertent breaches from human error and system glitches still accounted for nearly half of the data breaches in the report, costing companies USD 3.5 million and USD 3.24 million, respectively.
• Also, for the ninth year in a row, health-care organisations had the highest cost of a breach nearly USD 6.5 million on average (over 60%more than other industries in the study).
• The report found that the effects of a data breach are felt for years. While an average of 67% of data breach costs were realised within the first year after a breach, 22% accrued in the second year and another 11% accumulated more than two years after a breach.
• The longtail costs were higher in the second and third years for organisations in highly-regulated environments, such as health care, financial services, energy and pharmaceuticals, it added.

IMF cuts India’s growth forecast for 2019-20 to 7%

News

• The International Monetary Fund (IMF) has cut India’s growth forecast for 2019-20 to 7% from its forecast in April of 7.3% on poor demand conditions, it said.

Beyond News

• The IMF’s World Economic Outlook update also cut India’s growth forecast in 2020-21 to 7.2% from the previous estimate of 7.5%.
• India’s economy is set to grow at 7% in 2019, picking up to 7.2% in 2020.
• The downward revision of 0.3 percentage points for both years reflects a weaker-than-expected outlook for domestic demand.
• This latest cut in the forecast follows a series of cuts by the IMF in its previous updates.
• In April, the IMF had cut India’s growth forecast for 2019-20 to 7.3%, which was 0.2 percentage points lower than the forecast made in January, which itself was 0.1 percentage points lower than the forecast made in October 2018.
• The IMF has also cut its forecast for world GDP growth by 0.1 percentage point each in 2019 and 2020 to 3.2% and 3.5%, respectively.
• The growth forecast for emerging markets and developing economies has also been cut by 0.3 percentage points for 2019 to 4.1% and by 0.1 percentage points for 2020 to 4.7%.

More UPI transactions, but BHIM app’s share goes down

News

• The number of transactions done through the Unified Payment Interface (UPI) has increased by 180 times since its inception in December 2016, according to data given in the Lok Sabha.

Beyond News

• However, private players have cut into the government-backed Bharat Interface for Money (BHIM) app’s share of the transactions, while card-based transactions are still the most preferred online payment method.
• The number of transactions through UPI rose from 41.5 lakh in January 2017 to a whopping 7,545.4 lakh in June 2019. The number of banks on the interface also saw a significant growth.
• From 41% in January 2017, BHIM’s share of transactions in overall UPI has fallen to just over 2% in June 2019. Competition from private players has led to this.
• Three out of every five online transactions were carried out with either debit or credit cards, while 24% were done through net banking in FY19. UPI accounted for about 17%.
• Within UPI transactions, 54% were carried out using GPay app, while BHIM app constituted only 4.1%. The graph shows the share of UPI transactions carried out in FY19.
• It is to be noted that the National Payments Corporation of India, the umbrella organisation of all retail payments in India, does not give the split among private players, and the numbers above are based on an industry report by Razorpay.
• UPI and wallets recorded the least money spent (average) per transaction, with EMIs and net banking accounting for the big-ticket transactions.

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