17th September 2024
Article: 17th September, 2024
Topic: SEBI drops charges against NSE
Relevance: GS Paper: 3 – Economy
Source: Bar and Bench
Context
- The National Stock Exchange (NSE) is no longer facing charges from the Securities and Exchange Board of India (SEBI).
- Previously, SEBI had imposed a five-year ban on the officials’ ability to work with listed companies or market intermediaries and ordered the NSE to repay Rs. 624.89 crore.
About the National Stock Exchange (NSE) of India
- Based in Bombay, the NSE is the biggest financial market in India. It was founded in 1992 and opened for business in 1994.
- By substituting an open acquisition system for automated trading systems, it improved efficiency and transparency.
Market Capitalization
- Based on market capitalization, the NSE is the sixth-largest stock exchange globally as of December 2023.
- With the combined market capitalization of the NSE and BSE at $4.33 trillion as of January 2024, India is the fourth largest stock market.
Special features:
- The NSE benchmark index, or Nifty 50, is a representation of the 50 biggest liquid companies in India.
- Electronic Commerce: Enhanced accessibility and efficiency through the introduction of fully screen-based electronic commerce.
- Market segments: Offers trading in derivatives, income, and expenses in addition to stocks.
- Legal Review: Fair market practices are upheld, compliance is guaranteed, and the NSE is regulated by SEBI.
Remark regarding common space:
- Allegations emerged between 2012 and 2014 stating that the NSE permitted arbitrary access to certain brokers via the co-location (KOLO) facility, which led to faster data transmission and potential volatility in the market.
- Co-location server users benefited from faster trading, which was crucial for high-frequency trading that led to improper behavior.
- In 2015, a whistleblower voiced concerns regarding significant market manipulation via “dark fiber.”
- The problem was allegedly made worse by non-empaneled ISPs connecting fiber networks to specific brokers.
NSE and officials are released by SEBI regarding the co-location issue:
- Prior scrutiny of evidence: SEBI’s latest order has revealed that a preliminary investigation by the Securities Appellate Tribunal (SAT) has not found any irregularities committed by NSE or its employees.
- Lack of evidence of collusion: SEBI demanded more weight be given to the evidence after concluding that there was no evidence of conspiracy or collusion.
- OPG Securities and Secondary Servers: According to SEBI’s findings, 93 other members also kept access to the secondary server, which lessened the likelihood of consolidation even though OPG Securities kept it.
Also Read Topics & Concepts:
Prelims Practice Questions
Q. Consider the following statements regarding National Stock Exchange of India Ltd.
1. It was established in 1952.
2. Its 50-share and 500-share indices are called S&P CNX-50 (Nifty Fifty) and S&P CNX-500, respectively.
Which of the above statements are incorrect?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Ans: a
Explanation
Established in 1992, the National Stock Exchange of India Ltd. (NSE) commenced operations in 1994.
Financial institutions IDBI, LIC, and GIC are among the sponsors of the exchange, with IDBI serving as its promoter.
S&P CNX-50 (Nifty Fifty) is the name of the 50-share index, and S&P CNX-500 is the 500-share index.
Mains Model Questions
Q. The National Stock Exchange’s (NSE) recent developments highlight India’s corporate governance situation. Discuss the problems with the corporate working culture in India in light of this statement. Provide some recommendations for improving corporate governance in India as well.
| Introduction: The National Stock Exchange (NSE) scam in 2022, which resulted in the former CEO of the NSE’s arrest, exposed board-level managerial misconduct. It severely punished stock exchange corporate governance. Body: Issues: Corporate cultures that prioritize performance tend to overlook issues related to equity and fairness. Due to the significant growth of the stock market over the past ten years, other aspects of favoritism were seen as acceptable imperfections. a culture that values nepotism and loyalty more than integrity. Top management appoints board members (mostly promoters in India). It is challenging to bring up concerns with people who chose a member. Board members are encouraged by a culture of complicity to nod their heads and overlook wrongdoings in exchange for large benefits. Issue-raising members are ignored because they are deemed problematic. Suggestions Permit the selection of no more than 50% of independent directors by upper management. The remaining directors ought to be selected by other interested parties; they should answer to these parties rather than management. provisions for penalizing negligent directors using tools such as monetary fines, provisions for removal, etc. regulators’ own accountability through recurring audits and assessments. Make sure the public is given more access to the internal governance of regulators like the NSE. Interaction of industry stakeholders and creating awareness that focus on fairness and equity is crucial to ensure good performance in the long run. Conclusion: Improved corporate governance standards can lead to reduced market volatility, improved financial stability, and increased investments, all of which will contribute to improving the perception of the Indian corporate sector and move towards a five trillion-dollar economy. |
Article: 17th September, 2024
Topic: China’s carbon market
Relevance: GS Paper: 3 – Environment
Source: The Indian Express
Context
A proposal to incorporate the production of steel, aluminum, and cement into its carbon emissions trading scheme (ETS) is being shared with the public by China.
The carbon market in China
- Emission trading systems (ETS) and the voluntary China Certified Emission Reduction (CCER) scheme comprise China’s carbon market. The former is mandatory, while the latter is a voluntary greenhouse gas (GHG) emissions reduction trading market.
- Emissions from power generation, steel, building materials, non-ferrous metals, petrochemicals, chemicals, paper, and civil aviation together account for 75% of China’s total emissions; these eight major emitting sectors will eventually be included in the ETS.
- The voluntary market mechanism enables firms to purchase CCERs in order to meet their ETS compliance targets, even though the two schemes function independently.
What is the Emission Trading System?
- On the Shanghai Environment and Energy Exchange, ETS began trading in 2021.
- Businesses are given a certain number of free certified emission allowances (CEAs) under the program.
- A company must purchase additional allowances from the market to make up the difference if actual emissions during a given compliance period exceed the quota. It can sell its excess CEAs if its emissions are reduced.
- Instead of using absolute emission levels, the government sets industry carbon intensity benchmarks that are gradually lowered to determine allocations.
- Monthly submission of key parameters and annual reporting of emission data are mandatory for emitters.
- Since its launch, it has grown to become the biggest emissions trading platform in the world, covering roughly 5.1 billion tons of carbon dioxide equivalent, around 40% of China’s total.
Carbon Markets
- Carbon credits are bought and sold on carbon markets, which are trading platforms.
- By buying carbon credits from organizations that eliminate or significantly reduce greenhouse gas emissions, businesses and individuals can use the carbon market to make up for their carbon emissions.
- A tonne of carbon dioxide or the equivalent amount of another greenhouse gas avoided, sequestered, or reduced is equal to one tradable carbon credit.
- A credit turns into an offset and is non-tradable when it is used to cut, sequester, or prevent emissions.
- Carbon markets can be broadly classified into two categories: voluntary and compliance.
- Any national, regional, and/or international policy or regulatory requirement gives rise to compliance markets.
- The voluntary issuance, purchase, and sale of carbon credits is referred to as voluntary carbon markets, both domestically and internationally.
Importance
- By placing a price on carbon, businesses are incentivized to discover economical means of cutting emissions.
- Businesses have a choice in where and how to cut emissions, which may inspire more creative solutions.
- Funding initiatives that support environmental sustainability can be provided by compensating mechanisms.
- The implementation of the Paris Agreement and the Nationally Determined Contributions (NDCs) will depend heavily on carbon financing.
Also Read Topics & Concepts:
Prelims Practice Questions
Q. Consider the following statements (UPSC PYQ 2023)
Statement—I Carbon markets are likely to be one of the most widespread tools in the fight against climate change.
Statement—II Carbon markets transfer resources from the private sector to the State.
Which one of the following is correct in respect of the above statements?
a. Both Statement—I and Statement—II are correct and Statement—II is the correct explanation for Statement—I
b. Both Statement—I and Statement—II are correct and Statement—II is not the correct explanation for Statement—I
c. Statement—I is correct but Statement—II is incorrect
d. Statement—I is incorrect but Statement—II is correct
Ans: c
Explanation
One of the most widely used instruments in the fight against climate change is probably the carbon market. Carbon markets, alternatively referred to as cap-and-trade or emissions trading systems, are systems that impose a cost on carbon emissions. They enable organizations to buy and sell carbon credits, which provides financial incentives for cutting emissions.
Carbon markets can be used to move resources from the private to the public sectors and involve financial transactions. Rather, they make it easier for entities—which can be both public and private—to exchange emission allowances.
Mains Model Questions
Q. Should the pursuit of carbon credits and clean development mechanisms set up under UNFCCC be maintained even though there has been a massive slide in the value of a carbon credit? Discuss with respect to India’s energy need for economic growth. (UPSC PYQ 2014)
| Introduction: A critical first step in mitigating climate change is the pursuit of carbon credits and clean development mechanisms (CDM), which are outlined in the United Nations Framework Convention on Climate Change (UNFCCC). Concerns concerning the efficiency of carbon credits in advancing clean energy and sustainable development have been raised by their value decline. Body: Advantages of CDMs and Carbon Credits: Companies are encouraged to lessen their carbon footprint by carbon credits and CDMs, which lowers greenhouse gas emissions. They offer developing nations an affordable means of lowering their carbon emissions. By selling carbon credits to businesses, they can bring in money. Disadvantages with CDMs and Carbon Credits: The recent sharp decrease in the value of carbon credits has made investing in them less appealing to businesses.Getting CDMs and carbon credits can be an expensive and time-consuming process. There are other significant efforts to lower carbon emissions that may be overlooked in favor of carbon credits and CDMs. Energy Requirements for Economic Growth in India: India’s economy is expanding quickly, and it needs energy to keep up with its growth. India is dedicated to cutting its carbon emissions, but economic expansion cannot be sacrificed in the process. India must strike a balance between its commitment to lowering carbon emissions and its energy needs. Conclusion: India needs energy to grow economically, so a balanced strategy that tackles climate change and promotes sustainable development is needed. While CDMs and carbon credits can be very helpful, they need to be strengthened and reassessed to make sure they encourage the switch to cleaner energy sources. |
Article: 17th September, 2024
Topic: India’s position on fish negotiations
Relevance: GS Paper: 3 – Economy
Source: Business Line
Context
Small-scale fishermen have recently voiced serious concerns regarding the current proposed language on fisheries subsidies from the World Trade Organization (WTO).
Depletion of Fish Stocks Worldwide:
- According to the WTO, there is currently overfishing in 37.7% of global fish stocks, up from 10% in 1974.
- The government spends $35 billion on fishing, of which an estimated $22 billion is used to increase the amount of unsustainable fishing.
- China, the EU, the US, South Korea, and Japan are the primary donors.
- According to estimates from the Indian government, the annual subsidies received by each family of fishermen are less than $15.
What is the Fisheries Subsidies Agreement of the WTO?
- Adopted in 2022 during the 12th Ministerial Conference (MC12), it represents a significant advancement in ocean sustainability.
- It forbids detrimental fisheries subsidies, which are a major cause of the global depletion of fish stocks and contribute to overcapacity and overfishing.
- For the membership, the Agreement is a historic accomplishment because –
- The first goal of the Sustainable Development Goals (SDGs) to be achieved in full,
- Using a multilateral agreement, the first SDG target was achieved.
- The first environmental-focused WTO agreement,
- The first comprehensive, legally-binding, international accord on ocean sustainability and
- only the second deal reached since the WTO’s founding.
- Two-thirds of members must deposit their “instruments of acceptance” with the WTO in order for the Agreement to go into effect.
India’s Concerns About the Fisheries Subsidies Agreement:
- Discriminates against less developed nations:
- India calls attention to significant gaps that may encourage irresponsible fishing methods, particularly by major industrial fishing nations.
- For instance, the proposed text avoided requiring developed fishing nations with superior notification and monitoring systems to reduce detrimental subsidies.
- Distinctive treatment clauses:
– It is thought that the proposed provisions for small-scale fishermen’s special and differential treatment are insufficient. - They don’t address the fundamental problem with industrial fishing because they have non-industrial characteristics.
Way Forward:
- Subsidies should be used to appropriately constrain large-scale industrial fishing fleets that engage in deep-sea fishing.
- The assistance provided by developing countries and least developed countries (LDCs) should not deter efforts to increase fishing capacity.
- Small-scale fishermen are pushing for more effective reduction of industrial fishing subsidies as well as stronger support for sustainable fishing methods.
Also Read Topics & Concepts:
Prelims Practice Questions
Q. Consider the following statements regarding Fisheries sector in India
1. India is the world’s second-largest aquaculture producer of fish.
2. The state that produces the most marine fish is Andhra Pradesh.
3. The world’s biggest exporter of fish is India.
Which of the above statements are correct?
- 1 only
- 2 and 3
- 1 and 2
- 1, 2, 3
Ans: a
Explanation
India is the world’s second-largest aquaculture producer of fish.
With 16.67% of the nation’s total marine fish production, Gujarat is the state that produces the most marine fish. India ranks fourth globally in terms of fish exports. India’s exports make up 7.7% of the world’s fish production.
Mains Model Questions
Q. Examine the present situation of India’s fishing industry and note the difficulties it is now facing. Analyze how well government programs and policies are working to address these issues and encourage sustainable development in the industry.
| Introduction: Millions of people in India depend on the fisheries industry for their livelihood, and it plays a crucial role in the country’s agricultural production. But in order to guarantee the sector’s sustainable growth, a number of issues must be resolved. Body: The state of India’s fishing industry right now Economic Importance: Fishing supports the livelihoods of over 28 million people, many of whom are from underprivileged and marginalized communities, and accounts for 1.07% of India’s GDP. India is the third-largest fish producer in the world, accounting for 7.96% of total fish production in the world.Diversity and Production: India has a large and diverse fishery, encompassing both inland and marine resources. India produced 14.73 million metric tonnes (MMT) of fish in FY 2020–21, with contributions from the marine (3.48 MMT) and inland (11.25 MMT) sectors. Challenges the Sector Faces Sustainability: With nearly 90% of the world’s marine fish populations either fully exploited or overfished, fish populations face significant challenges. While deep oceans may contain high-value fish, India’s nearshore coastal waters are particularly overfished. Growing Demand: Given the current rates at which marine fish stocks are being depleted, meeting the growing demand for animal protein on a worldwide scale will require a major increase in fish output. Production Efficiency: The productivity of Indian fisheries is low for each fisherman, boat, and farm compared to global standards. Initiatives and Policies of the Government The ₹20,050 crore Pradhan Mantri Matsya Sampada Yojana (PMMSY) was introduced in 2020 as a component of the Aatmanirbhar Bharat package. It is the largest investment in India’s fishing industry to date. In addition to promoting socioeconomic development for fishermen, fish farmers, and fish workers, this program seeks to promote sustainable development.Fund for the Development of Fisheries and Aquaculture Infrastructure (FIDF): ₹7,522 crore was invested in its establishment to fill in the sector’s infrastructure gaps. New Policy Initiatives: Recent policy initiatives include the introduction of deep-sea fishing vessels, upgrades to vessels and equipment, and support for novel practices such as recirculatory aquaculture systems and open sea cage culturing.Budget Allocation: In 2022–2023 the Department of Fisheries saw a 73.52% increase in funding, and the industry was given access to Kisan Credit Cards, which offered concessional institutional credit. Conclusion: The Indian government, which prioritizes sustainability, modernization, and socioeconomic development, has taken major action to address the issues facing the fishing industry. The success of these programs and policies—especially PMMSY and FIDF—indicates a thorough strategy for advancing sustainable development in the industry. However, maintaining the long-term viability and prosperity of India’s fisheries sector will require ongoing evaluation and modification of these policies. |
Article: 17th September, 2024
Topic: Direct benefit transfer empowers women
Relevance: GS Paper: 2 – Vulnerable sections
Source: The Indian Express
Context
- Thirteen of the 315 DBT schemes implemented by 53 ministries under the Union government are associated with the Ministry of Women and Child Development.
- The ministry is ranked 31st in the DBT Performance Rankings, indicating a poor track record of implementing these schemes.
The situation of Indian women:
- Employment Status: In India, 28% of women are in the labor force. Ninety-five percent of young people are women, and one in three of them are not enrolled in school, working, or receiving training.
- Women in leadership roles: Out of every five men in managerial positions, there is only one woman.
- Domestic violence: According to a Niti Aayog survey, three out of ten women in the 18–49 age range have suffered abuse at the hands of their spouses.
- Political representation gaps: Of the 543 members of the 16th Lok Sabha, 74 (2024) are women MPs, or 13.6% of all MPs.
- Financial Gap: According to the Findex Survey 2021, 32% of bank accounts held by women in India are dormant.
Challenges to women achieving financial autonomy:
- Restricted physical availability of banking services: In addition to “time poverty” and the financial burden of transportation costs to and from banking outlets, “mobility constraints” that prohibit women from traveling alone also impede limited physical access to banking services.
- Restricted access to ICT: Women’s mobile engagement is significantly hampered by gender norms surrounding subservience, patrilocal exogamy, marriage purity, and caregiving.
- The digital literacy gap is caused by subtle gender biases that are exacerbated by information asymmetry, such as rude or dismissive behavior from bank employees.
- High social costs: Social barriers, such as embarrassment over small deposits, prevent women from using financial services. They consequently hoard cash at home until they have a bigger quantity.
DBT’s part in empowering women
- Increased mobility: Women have more control over how they use their financial resources when money is transferred to their accounts directly or through mobile payments.
- Increased bargaining power: Women have more clout in households when they are financially independent, which changes the traditional power structures and empowers women.
- Positive effects on women’s employment, health, and education are caused by the ripple effect.
Way Forward:
- Transforming policies from gender-neutral to gender-intentional: To close the gap in financial inclusion, gender-intelligent regulatory frameworks, acknowledging alternative forms of identification, and adding a vulnerability lens to consumer protection laws are all necessary.
- Gather data that is broken down by gender: This will help formulate more effective policies and provide a deeper understanding of the underlying reasons behind the gender gap in financial inclusion.
- Infrastructure should be designed with gender equality in mind, and financial service providers should work together to improve interoperability.
- Contextual training for women is facilitated by assigning female employees to troubleshoot tasks like app downloads, bank account links, and transaction types in order to guarantee that information is absorbed.
Also Read Topics & Concepts:
Prelims Practice Questions
Q. Consider the following statements regarding Direct Benefit Transfer (DBT)
1. The goal of DBT is to directly deposit subsidy benefits into the bank accounts of recipients from a range of Indian welfare programs.
2. Beneficiaries must make sure they link their bank account to their Aadhaar number in order to receive the DBT benefits.
Which of the above statements are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Ans: c
Explanation
The goal of DBT is to directly deposit subsidy benefits into the bank accounts of recipients from a range of Indian welfare programs.
Beneficiaries must make sure they link their bank account to their Aadhaar number in order to receive the DBT benefits.
DBT transfers lessen the chance of fraud while facilitating the safe and quick flow of information and money.
It transfers the subsidy amount straight into the beneficiary accounts, doing away with the need for middlemen, such as government employees.
Mains Model Questions
Q. How has India benefited from the Direct Benefit Transfer (DBT) Scheme in terms of addressing the various needs of its people and guaranteeing inclusive, equitable, and balanced growth?
Introduction:
Transparency and the elimination of fund distribution theft are the main goals of the Direct Benefit Transfer program. The Direct Benefit Transfer (DBT) Scheme in India has been praised by the International Monetary Fund (IMF) as a “logistical marvel” that has benefited women, the elderly, and farmers in particular, reaching hundreds of millions of people.
Body:
India has benefited from the Direct Benefit Transfer (DBT) Scheme in the following ways, which have helped it meet a variety of needs and ensure inclusive, equitable, and balanced growth:
- Financial inclusion: The government worked to increase access to banking and telecommunication services, create bank accounts for every household, and extend Aadhaar to everyone. Additionally, Bank Mitras provides last-mile banking.
- Assistance programs: The DBT architecture is used by the National Social Assistance Program and a number of scholarship programs to provide social security.
- Rehabilitation plans: DBT creates new opportunities for social mobility for people from all walks of life when used in conjunction with rehabilitation plans like the Self Employment Scheme for Rehabilitation of Manual Scavengers.
- Aadhaar Payment Bridge: To facilitate immediate money transfers from the government to people’s bank accounts, it upgraded the Public Finance Management System and built the Aadhaar Payment Bridge.
- Diverse stakeholder participation: The Unified Payment Interface and the Aadhaar-enabled Payment System increased interoperability and private sector participation.
- Direct receipt of subsidies: This method made it possible for all rural and urban households to be connected in a unique way to a variety of government programs so that they could receive subsidies straight into their bank accounts and make simple money transfers.
- DBT in relation to government initiatives: Currently the main tenet of the government’s agenda for inclusive growth, it consists of 318 programs from 53 central ministries that cover a wide range of industries, welfare objectives, and the vast majority of the nation.
- Urban areas: Funds are successfully transferred to eligible beneficiaries through DBT through the PM Awas Yojana and LPG Pahal scheme.
- During the pandemic, nearly 80 crore people received free rations through the Pradhan Mantri Garib Kalyan Yojana, all female Jan Dhan account holders received fund transfers, and small vendors received assistance through PM-SVANidhi.
Conclusion:
The welfare component of governance has changed as a result of direct benefit transfer. Improved grievance procedures, financial and digital literacy, and an innovative system that empowers people all need to happen.