News Snippet

News 1: India’s jobless rate rose to 3-month high of 8% in November

News 2: Digi Yatra initiative

News 3: Centre to cut funds if land is not allotted for housing scheme

News 4: How will global layoffs impact India?

News 5: How the e-rupee will work?

News 6: Nepal elections – Possible outcomes, and implications for India

Other important news:

  1. India’s entire 2/3-wheeler fleet needs $285 bn to turn electric
  2. Baguette makes it to UNESCO intangible cultural heritage list

News 1: India’s jobless rate rose to 3-month high of 8% in November


Background

India’s unemployment rate rose to 8% in November, the highest in three months, from 7.77% in the previous month, data from the Centre for Monitoring Indian Economy (CMIE) showed on Thursday.

The urban unemployment rate rose to 8.96% in November from 7.21% in the previous month, according to the data.

The rural unemployment rate slipped to 7.55% from 8.04%, it showed.

Unemployment rate

The unemployment rate is essentially the percentage of working-age people (15 years and above) who are demanding work but not able to get a job.

The underlying size of the labour force — that is, the percentage of working-age people demanding work — itself varies over time and is measured by the Labour Force Participation Rate (LFPR).

Unemployment rate = [Total unemployed / Total Labour Force]

In other words, unemployment rates are expressed as a percentage of the labour force, not the total population.


News 2: Digi Yatra initiative


Background

Passengers traveling from Delhi, Varanasi and Bengaluru will be able to use their face as boarding pass from December 1 to enter these airports, to access the security check area and pass the boarding gate.

Travellers will have to mandatorily provide their Aadhaar details to avail themselves of this service.

Face recognition technology for boarding pass

The technology, however, is not available at airline check-in counters at the moment and is expected to be introduced at a later stage, said airport sources.

Civil Aviation Minister Jyotiraditya Scindia launched the technological initiative called “Digi Yatra” at Indira Gandhi International Airport in Delhi on Thursday.

The facility is also expected to be operational at Hyderabad, Kolkata, Pune and Vijayawada by March 2023, and then gradually across various airports in the country.

The service is voluntary in nature, and is currently available only for domestic flights.

What is DigiYatra and how will it work?

DigiYatra envisages that travellers pass through various checkpoints at the airport through paperless and contactless processing, using facial features to establish their identity, which would be linked to the boarding pass.

With this technology, the entry of passengers would be automatically processed based on the facial recognition system at all checkpoints – including entry into the airport, security check areas, aircraft boarding, etc.

DigiYatra process

Under the DigiYatra process, a passenger will first be required to download the Digi Yatra app on his or her phone, register with an OTP received on the Aadhaar-linked mobile number, upload Aadhaar details and a photo followed by uploading the boarding pass for the upcoming travel.

This will now allow the passenger to enter the airport building after scanning the QR code on the digital boarding pass followed by a facial scan. Next, the passenger can gain access to the security area too with a mere face scan.

The passenger will have to continue to use the traditional method for check-in and baggage drop, which involves a digital or a paper boarding pass along with other identity documents.

Speaking about privacy concerns, Mr. Scindia said that passenger’s identity details and personally identifiable information (PII) will be stored in a secure wallet in the passenger’s phone.


News 3: Centre to cut funds if land is not allotted for housing scheme


Background

The States unable to provide land to the landless beneficiaries of the Union government’s flagship housing scheme by December 15 will find their targets for this financial year redistributed to other States, the Centre warned recently.

This means that the Centre will withdraw its share of funds allocated to errant States under the Centrally sponsored Pradhan Mantri Gramin Awas Yojana (PMAY-G).

Land allocation and housing scheme

More than a fifth of such landless beneficiaries are in Tamil Nadu.

As per the statistics available with the Union Ministry of Rural Development, 2.06 crore houses had been constructed till November 2022.

With the scheme entering its final phase, the construction of houses for at least 2.5 lakh landless beneficiaries across the country is one of the last impediments. However, 43% of landless beneficiaries are yet to be provided with land.

Tamil Nadu, with 56,709 landless beneficiaries still on the wait list, followed by Maharashtra (48,272), Assam (23,064), Odisha (19,869) and Bihar (16,943).

Pradhan Mantri Gramin Awas Yojana (PMAY-G)

Launched: April 2016

Type: Centrally Sponsored Scheme

A goal of building 2.95 crore houses for the rural poor by March 2022, with the target figure derived from the Socio-Economic Caste Census, 2011.

Timeline: The scheme was launched in April 2016 Due to the COVID pandemic, the deadline was extended by two years till March 2024.

Need for housing

Housing is one of the basic requirements for human survival. For a normal citizen owning a house provides significant economic and social security and status in society.

For a shelter less person, a house brings about a profound social change in his existence, endowing him with an identity, thus integrating him with his immediate social milieu.

Objective

To provide pucca house to all who are houseless and living in dilapidated houses in rural areas. The overall target is to construct 2.95 crore pucca houses with basic amenities by March, 2024.

Funding

For plain areas, Central: State = 60:40

For Northeastern areas, Central: State = 90:10


News 4: How will global layoffs impact India?


Background

Over the past two months, a slew of U.S. multinational companies including tech giants Amazon, Meta, Intel, Twitter and financial behemoths like Citi and Morgan Stanley, announced massive layoffs.

According to a global placement and coaching firm, the layoffs crossed 60,000 in September and October. These developments are bound to have an impact, on India’s export prospects, especially in the information technology (IT) sector.

Why are layoffs becoming common?

Alphabet CEO Sundar Pichai had warned of a coming winter in the tech sector earlier this year. A potential economic recession is a big red flag.

With inflation soaring in most parts of the world, central banks have been scrambling since March this year to rein it in by increasing rates so as to make it more costly to borrow and consume. This will eventually affect economic growth and jobs.

The International Monetary Fund (IMF) has cited forecasts for global GDP growth in both 2022 and 2023 as gloomy, given the pandemic and ongoing Russia-Ukraine war. Setting aside the 2008 crisis numbers, estimates for this calendar and the next by the IMF are the weakest since 2001.

What is the outlook for the Indian IT industry?

The Indian IT services firms are among the largest employers in the organised sector and any global economic trend is bound to have an impact on their growth projections. Managements look at headcount numbers critically when they want to cut costs and protect profit margins as they are accountable to investors.

All top companies except Wipro saw a rise in revenue and net profit. Wipro’s net profit slid 9% from a year earlier for the quarter ended September.

The attrition rates, or the number of employees per 100 quitting on their own, of the top two firms, TCS and Infosys, show that these rates are still high, which means that there is enough business for the sector for competitors to draw away employees with promise of higher salaries.

What about start-ups?

News of layoffs in the Indian start-up front is predominantly in EDtech, or the educational technology front. A lesser share of internet users visiting educational websites since the decline of the pandemic is cited as one reason.


News 5: How the e-rupee will work?


Background

The Reserve Bank of India (RBI) on 01st December, 2022 launched the Central Bank Digital Currency (CBDC) — digital rupee or e-rupee (e₹) — for the common man.

What is CBDC or the digital rupee?

CBDC is a legal tender issued by the RBI in digital form. It is the same as the fiat currency, and is exchangeable one-to-one with the fiat currency.

Only its form is different — it is not paper (or polymer) like physical cash. It is a fungible legal tender, for which holders need not have a bank account.

CBDC will appear as ‘liability’ (currency in circulation) on the RBI’s balance sheet.

The e-rupee will be in the form of a digital token representing a claim on the central bank, and will effectively function as the digital equivalent of a banknote that can be transferred electronically from one holder to another.

A token CBDC is a “bearer-instrument” like a banknote, meaning whoever ‘holds’ the tokens at a given point in time will be presumed to own them.

How is RBI introducing the CBDC?

The pilot launched will initially cover four cities — Mumbai, New Delhi, Bengaluru and Bhubaneswar — and will be later extended to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla.

The pilot will work in a closed user group (CUG) comprising participating customers and merchants, the RBI has said. Select customers from the selected cities will get CBDC wallets with notes printed digitally with the RBI Governor’s signature.

Eight banks will participate in the pilot — the State Bank of India, ICICI Bank, Yes Bank and IDFC First Bank in the first phase in the first four cities, and subsequently, Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank.

The scope of the pilot may be expanded gradually to cover more banks, users, and locations.

How can an individual use the e-rupee?

E-rupees will be issued in the same denominations as paper currency and coins, and will be distributed through the intermediaries, that is banks. Transactions will be through a digital wallet offered by the participating banks, and stored on mobile phones and devices.

Transactions can be both person to person (P2P) and person to merchant (P2M). For P2M transactions (such as shopping), there will be QR codes at the merchant location.

A user will be able to withdraw digital tokens from banks in the same way she can currently withdraw physical cash. She will be able to keep her digital tokens in the wallet, and spend them online or in person, or transfer them via an app.

How is this different from other wallets?

Not very different in terms of how it will be used. However, UPI-based apps like Google Pay and Paytm have a daily and per-transaction spending limit.

The RBI has not fixed any limit on holding digital rupees in wallets. Digital rupee transactions above Rs 2 lakh are likely to be reported for tax matters.

What are the types of e-rupee?

Based on usage and the functions performed by the digital rupee, and considering different levels of accessibility, the RBI has demarcated the digital rupee into retail and wholesale categories.

Retail e-rupee (launched on 1st December, 2022) is an electronic version of cash primarily meant for retail transactions, which can potentially be used by almost everyone, and can provide access to safe money for payment and settlements.

Wholesale CBDC is designed for restricted access to select financial institutions. It has the potential to transform the settlement systems for financial transactions undertaken by banks in the government securities (G-Sec) segment and inter-bank market, and make the capital market more efficient and secure in terms of operational costs, use of collateral, and liquidity management.

What was the need to introduce the e-rupee?

Leveraging blockchain technology for the e-rupee is a stepping stone for India becoming a $1 trillion digital economy.

India is witnessing massive growth in digital transactions — the volume and value of UPI transactions increased by 118 per cent and more that 98 per cent respectively in Q2 2022 compared to Q2 2021, said Srinivas Nidugondi, Chief Growth & Transformation Officer at the mobility solutions provider Comviva.

How is CBDC different from cryptocurrency?

Being backed by the RBI, e-rupee is not comparable to private virtual currencies like Bitcoin that have mushroomed over the last decade.

Private virtual currencies sit at substantial odds with the historical concept of money. They are not commodities or claims on commodities as they have no intrinsic value; claims that they are akin to gold seem opportunistic.

Usually, certainly for the most popular ones now, they do not represent any person’s debt or liabilities. There is no issuer. They are not money — certainly not currency — as the word has come to be understood historically.

Cryptos are not backed by the central bank; in fact, the RBI wants the government to ban cryptocurrencies in India.

The inherent design of cryptocurrencies is more geared to bypass the established and regulated intermediation and control arrangements that play the crucial role of ensuring integrity and stability of the monetary and financial ecosystem, says the RBI’s concept note on digital rupee.

What are the benefits of e-rupee?

  1. Reduced dependency on cash
  2. Higher seigniorage due to lower transaction costs
  3. Reduced settlement risk
  4. Large cash usage can be replaced by CBDCs
  5. The cost of printing, transporting, storing and distributing currency can be reduced
  6. Payments are final, and thus reduce settlement risk in the financial system
  7. The need for interbank settlement disappears
  8. Enables a more real-time and cost-effective globalization of payment systems
  9. Reduces operational costs associated with physical cash management
  10. Enhance settlement efficiency
  11. Spur innovation in cross-border payments

Will CBDC work in offline mode?

There is no indication yet from the RBI that the e-rupee will function in the offline mode. While offline functionality will allow CBDC transactions in regions with poor or no Internet connectivity and create digital footprints of the unbanked population in the financial system.

The RBI feels that a risk of ‘double-spending’ exists in offline mode — because it will be technically possible to use a CBDC unit more than once without updating the common ledger of CBDC.

However, the RBI has said this can be mitigated to a large extent by technical solutions and appropriate business rules including a monetary limit on offline transactions.

Is it vulnerable to cyber-attacks?

The RBI concept paper says CBDC ecosystems may be at similar risk for cyber-attacks as existing payment systems. Cybersecurity considerations will need to be taken care of, both for the item and the environment.


News 6: Nepal elections – Possible outcomes, and implications for India


Background

Votes are still being tallied in the Nepal parliamentary elections that were held on November 20, only the second since the country adopted its republican constitution in 2015.

From the count so far, the six-party pre-poll alliance led by Prime Minister Sher Bahadur Deuba’s Nepali Congress and the Communist Party of Nepal (Maoist Centre) of Pushpa Kamal Dahal ‘Prachanda’ is in the lead.

What Delhi hopes

From India’s perspective, the continuance of a Deuba-led government is the best scenario. The Nepali Congress has old ties to India, and under his prime ministership, India-Nepal ties recovered to a great extent from the low to which they had sunk under Prime Minister K P Oli’s watch.

After succeeding Oli in a game of thrones in 2021, Deuba made his first visit to India in April this year. The three day tour included Varansi, and the Kasi Vishwanath temple and helped to kick start a relationship that had been in the doldrums since the map controversy over Lipulekh in 2020, with Oli seen to be raking it up for political gain back at home.

The Indian establishment views the former prime minister as “pro-China”. Even before Oli began his first term in October 2015 (it lasted until August 2016), India and Nepal had a bitter falling out over Nepal’s new constitution adopted just a month earlier. 

Delhi was upset that the final draft of the Constitution did not include the marginalisation concerns of the Madhesi and the Tharu — two ethnic groups that live in the southern Terai region along the border with India and constitute 40 per cent of Nepal’s population. Madhesis also have strong cross-border ethnic ties.

A blockade of Nepal along the Indian border with tacit support from Delhi crippled supplies to the landlocked country for several months, triggering massive shortages.

Oli turned to China for supplies, signing a trade and transit treaty during a visit to Beijing.

When his government was ousted within a year, Oli blamed India. He became prime minister again in 2018 following the 2017 elections after the unification of the Nepal Communist Party (United Marxist Leninist) with Prachanda’s CPN (Maoist Centre).

China is believed to have played a key role in the unification. In this second term, India-Nepal relations virtually broke down over the map controversy.

Following Deuba’s visit in April this year, Prime Minister Modi visited Lumbini, his fifth visit to Nepal and the first ever by an Indian head of government to the Buddhist holy site, Lord Buddha’s birth place.

Amid discussions on energy co-operation, talk about territory and the call for revising the Indio-Nepal Friendship Treaty quietened.

Dark horses

This election was supposed to bring big change in Nepal. That may not happen, as the old parties have still swung enough seats to put them in position for government formation. But several big guns, including ministers and incumbents have been sent packing by voters.

In the Madhes region, a new challenger has risen in the form of Janamat Party, led by C K Raut, who once campaigned for the region’s secession. The Madesh vote, earlier held by two parties, is now splintered.

Whatever the shape or colour of the new dispensation, the view from Delhi is that it is bound to be shaky and may not last its term due to the pulls and pressures from within.

India-Nepal ties post election

For India, the main challenge in Nepal is China’s looming presence. The nature of the India-China contestation in Nepal is different from elsewhere in South Asia.

Nepal and India have an open 1800 km -long border. Citizens of both countries can traverse this border freely, to live and work.

But sandwiched between the regional giant and an Asian superpower, Nepal is in the crosshairs of intense geopolitical rivalry. This is not necessarily bad as it gives Nepal enormous leverage with both sides, which it could use to secure the best “deal” for itself.

But it also means constant tensions with both neighbours. An alarm is bound to go up in Delhi when China is awarded projects such as the Terai-Madhes Expressway (cancelled by the Nepal Supreme Court earlier this week after Indian bidder Afcons mounted a legal challenge to it), or when China and Nepal discuss railway projects extending to Lumbini, close to the Indian border.

The United States is a recent entrant to the contest, with its interests becoming apparent in the manner in which Deuba’s government managed to find parliamentary support to ratify a long pending but contentious $ 500 million Millennium Challenge Corporation fund hours before it was due to expire.

The agreement will finance road building, building, power transmission lines, and facilitate cross-border electricity trade between Nepal and India.

The ratification has triggered concern that the “Quad has arrived in Nepal” . US diplomacy in Nepal is now more high profile than it used to be.

For Delhi, this is good news right now, as the US presence is seen as strengthening its hands, but for the long term, if geopolitical alliances shift, and India’s own partnerships evolve, there might be a different view.

Rae pointed out that energy trade has been the “big success story” in India-Nepal relations. During Deuba’s visit, the two sides signed a “vision document” on energy co-operation, agreeing to hydropower generation its “cornerstone”.

The elements of this co-operation include joint development of power generation projects in Nepal, development of cross-border transmission infra, bi-directional power trade with appropriate market access on both sides, co-ordination with each other’s national grids, and sharing operational information and technology.

They agreed to expand this co-operation to other countries in the Bhutan Bangladesh India Nepal sub-regional grouping


Other important news


India’s entire 2/3-wheeler fleet needs $285 bn to turn electric

The complete electrification of India’s entire fleet of two and three-wheelers will require financing to the tune of $285 billion (nearly ₹23 lakh crore), according to the World Economic Forum’s White Paper published in collaboration with NITI Aayog.

The WEF paper said the last-mile and urban delivery fleets were leading the adoption of electric two-and three-wheelers in India and were likely the first segments to transition completely to electric.

Baguette makes it to UNESCO intangible cultural heritage list

Baguette — the staple French bread — was inscribed into the UN’s list of intangible cultural heritage (ICH) on November 30. 

The baguette is a long and thin loaf made of flour, water, salt and yeast, and is consumed as a staple in France.

What is intangible cultural heritage according to UNESCO?

UNESCO defines “intangible” as “expressions that have been passed from one generation to another, have evolved in response to their environments and contribute to giving us a sense of identity and continuity…”

According to an official document by UNESCO, ‘intangible cultural heritage’ includes “oral traditions, performing arts, social practices, rituals, festive events, knowledge and practices concerning nature and the universe or the knowledge and skills to produce traditional crafts.”

It ascribes importance to “the wealth of knowledge and skills that is transmitted through it from one generation to the next,” which necessitates their preservation.

The document states that the safeguarding of an ICH means ensuring that it “remains an active part of life for today’s generations that they can hand on to tomorrow.”

The adoption of the Convention for the Safeguarding of the ICH by the General Conference of UNESCO in 2003 was a crucial step towards preserving intangible heritage from across the globe.

 UNESCO’s list of Intangible Cultural Heritage of Humanity was established in the year 2008.

What are India’s intangible cultural symbols on the UNESCO list?

The elements which have been on the representative list of intangible cultural heritage from India in the past decade include –

  1. Kolkata’s Durga Puja (2021)
  2. Kumbh Mela (2017)
  3. Navroz (2016), Yoga (2016)
  4. Traditional brass and copper craft of utensil-making among coppersmiths of Punjab (2014)
  5. Sankirtana, a ritual musical performance of Manipur (2013)
  6. The Buddhist chanting of Ladakh (2012)
  7. Chhau dance, Kalbelia folk songs and dance of Rajasthan, and Mudiyettu, a dance drama from Kerala (2010)
  8. Ramman, a religious festival and theatre performance of Garhwal in the Himalayas (2009)
  9. Kutiyattam or Sanskrit theatre, and Vedic chanting (2008).

 

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