Govt’s push for international trade in rupee: why and how

(GS-III: Indian Economy, Liberalization)

In News:

It came in the explained section of Indian Express, and argues why the government is pushing for international trade in Rupee.

Details:

Current system: Most of the trade currently is in US dollar, wherein an importer needs to pay in US dollar to pay for the import of goods to India and an exporter gets pain in the dollar which he then converts into Indian Rupee for use in India.

Working on payment system in INR:

To settle trade transactions with any country, banks in India would open Vostro accounts of correspondent bank/s of the partner country for trading. Indian importers can pay for their imports in INR into these accounts. These earnings from imports can then be used to pay Indian exporters in INR.

A Vostro account is an account that a correspondent bank holds on behalf of another bank — for example, the HSBC Vostro account is held by SBI in India.

Benefits of trading in Rupee:

Enable trading with Russia

Check dollar outflow

Slow the depreciation of the rupee

Promote the growth of global trade with emphasis on exports from India and to support the increasing interest of the global trading community in INR”.

Government measures:

RBI has put in place an additional arrangement for invoicing, payment, and settlement of exports/ imports in INR

Limitations:

The arrangement was not expected to help arrest the fall of the rupee to any significant extent.

Not all countries may agree to trade in Rupee as the credibility of the rupee is lower than US dollars.

Content moderation on Wikipedia

In News:

India summoned officials of Wikipedia, in response to cricketer Arshdeep Singh’s Wikipedia page being edited with misleading information that stated he was a “Khalistani”.

What is Wikipedia?

Multilingual free online encyclopedia written and maintained by a community of volunteers through open collaboration and a wiki-based editing system”.

Unlike traditional encyclopedias that have entries from pre-identified authors, all of Wikipedia’s encyclopedic content is user generated.

Advantages:

It allows the democratization of knowledge.

Unhindered access to edit.

Disadvantage:

Unhindered access to edit: It has resulted in concerns relating to the reliability of the information that it hosts.

Related Indian laws?

Section 79 of the Information Technology Act, 2000: Must abide by due diligence requirements under the Act and its Rules.

Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021: There are certain categories of information that an intermediary should not allow to be hosted or uploaded on its platform.

IT Rules, 2021: Actual knowledge occurs when an intermediary has been notified by either a court order or through an order of the appropriate agency demanding the removal of the offending content.

The Center should be the lone governing authority for issuing net shutdowns

In News:

The Center should be the “governing authority” in issuing internet shutdown orders and state governments should only issue such orders based on guidelines laid out by the Department of Telecommunications (DoT).

Key Highlights:

Internet shutdown orders are governed under the Temporary Suspension of Telecom Services (Public Emergency or Public Safety) Rules, 2017.

Rules framed by the DoT: Temporary suspensions can be “due to public emergency or public safety”, and gives senior bureaucrats from the Home Ministry at the central and state levels the power to order shutdowns.

Frequency of Internet Shutdowns:

Civil society estimates: India has imposed the maximum number of internet shutdowns for at least the last four years.

Global digital rights group Access: India enforced as many as 106 internet shutdowns last year.

India was third in terms of the total duration of domestic internet shutdowns, behind Myanmar and Nigeria.

Extension to Thermal Power plant

In News:

MoEFCC has given a two-year extension to all categories of the thermal power plant on Sulphur Dioxide (SO2) norms (however, the deadlines remain the same for meeting the Particulate matter (PM) and Nitrogen Oxides (NOx) norms)

Details:

Coal power plants are responsible for over 50% of the SO2 pollution.

Background:

MoEFCC has in 2015 set environmental norms for PM, SO2, NOx, Mercury and water use for coal-based Thermal power plants to be met by 2017 but later extended to 2022.

These norms require retrofitting and use of Flue Gas Desulphurisation (for removal of SO2), Selective Catalytic Reduction (SCR) technology (for removal of NOx)

An SCR system uses an aqueous urea solution known as AdBlue which, when injected in a specific way into an SCR catalytic converter, is converted into Ammonia.

Flue gases are exhaust gas.

CSR funding of NGOs

(GS-II: Development process and the development industry-NGOs, SHGs and various other groups and associations, donors, charities etc)

In News:

In any social effort, programme expenses attract the big cheques, especially from corporate social responsibility (CSR) initiatives in India.

How do NGOs spend:

Working on particular outcomes: For example, NGOs working on education receive funding for books, other online resources, teacher training, curriculum design, etc.

Administrative and support expenses: For instance, rent, electricity, technology and human resource costs.

Issues with the CSR:

Small, unlisted companies: The CSR amendment law, 2021 provides Substantial financial penalties for non-compliance.

Roughly 90% of the CSR funders are relatively small, unlisted companies.

CSR committee: Companies that spend less than ₹50 lakh annually on CSR are not required by law to have a CSR committee.

Leaving decision-making and action plans to company boards, having little to no experience in social impact.

CSR responsibility to the HR: Several larger companies have added CSR to the responsibilities of their HR or administration or communications head, rather than hiring professional leads, experienced in the social sector.

Awareness about CSR rules: Not every company is aware of all the facets of the CSR rules they are complying with.

For instance, the 5% cap on administrative overhead costs is applicable only to a business’ internal CSR operation cost, not to the grantee’s administrative costs.

Many CSRs make errors on safety: It leaves an NGO with unpaid bills or worse still, drawing on its scarce core funding from other donors to pay for these essential costs.

How can CSR funding of NGOs be made better?

Resource pooling by companies with other mission-aligned CSR or social sector stakeholders: This will increase their collective impact potential, and also hire or tap into professionals with experience working with NGOs

CSR funders should learn from peers: who view organizational development and indirect costs differently.

For example, ASK Foundation(CSR arm of ASK Group) is working to enable better livelihoods for rural communities.

Covering indirect costs and organizational development: they can help to relieve financial pressure and make organizations more resilient.

Corporate Social Responsibility(CSR):

It is a corporate initiative to assess and take responsibility for the company’s effects on the environment and impact on social welfare.

CSR is governed by clause 135 of the Companies Act, 2013.

India is the first country in the world to mandate CSR spending along with a framework to identify potential CSR activities.

Provisions within the Act: Applicable to companies with an annual turnover of 1,000 crores and more, or a net worth of Rs. 500 crores and more, or a net profit of Rs. 5 crores and more.