VISION

 What is the issue?

The Competition Commission of India (CCI) has ordered a probe against Google for alleged unfair revenue sharing terms with regard to news content.

What is the case about?

• The News Broadcasters and Digital Associations (NBDA) has filed a complaint against Google’s parent entities under the Competition Act, 2002.
• Compensation- The central contestation is that the Google has not compensated news publishers for their contribution to its platforms.
• News content- The NBDA has alleged that its members are forced to provide their news content to Google in order to prioritise their web links in the search engine result page.
• Dominance- Owing to the tech-giant’s dominance in the space, the publishers were forced to integrate content on their platforms.
• They have to trade in the company’s exchanges and use its buying tool, Google Ads/DV 360, to receive bids from advertisers.
• Accelerated Mobile Pages- Google has been accused of forcing members into using their Accelerated Mobile Pages (AMP) or building mirror-like light-weight webpages.
• Incompliance may affect the members’ placements in mobile search.
• Paywall options- The tech giant restricted paywall options unless publishers rebuild their websites as per AMP standards.
• Header bidding- The search-engine operator has also been accused of encouraging members to disable header bidding.

The Competition Act, 2002 and the 2007 amendment prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A).

How is the current situation?

• Google’s stand- According to Google, the revenues accrued are spent towards defraying the costs of maintaining data centres, technological investments, enabling innovations and maximising advertiser return on investment.
• CCI’s direction- The CCI has ordered the Director General (DG), its probe arm, to club the matters and submit a consolidated investigation report.

Why is Google dominant?

• Market share- As per the NBDA, Google’s search engine commands a 94% market share in the country.
• Online proliferation- It holds significance with the increased transition toward online news consumption (inclusive of app-based consumption).
• With online proliferation, there is an increased reliance of news publishers on digital ad revenues, and in turn, tech-based companies.
• Traffic- More than half of the total traffic on news websites is routed through Google.
• Prioritizing the search queries- Readers would more often opt for an online web search rather than reaching out to a specific news website by typing its URL in a browser.
• Since the search engine determines which news websites would be prioritised in search queries, it has become the first port of call for information online.

What is happening outside India?

 Why in news?

Seventy years after being extinct from India, world's fastest land animal Cheetahs walk on the Indian ground once again.

How did cheetahs go extinct in India?

 Why in news?

Prime Minister Narendra Modi expressed his condolences and hoped for an early restoration of normalcy in flood ravaged Pakistan.

What is the current Pakistan flood about?

• The flood has devastated the regions of Sindh and Baluchistan (Western half of Pakistan) badly, although Punjab and Khyber Pakhtunkhwa too have been affected.
• Pakistan’s National Disaster Management Authority claimed that about 15% of the country’s population had been affected by the floods.
• More than 3,500 people have been injured, and there are massive shortages of wheat and fuel.
• Preliminary estimates suggest a third of the country’s cultivated land have been inundated.
• About 2 million homes will have to be rebuilt from scratch.

How is the current Indo-Pak relation?

 Why in news?

On Teachers Day, PM Modi announced the Pradhan Mantri Schools for Rising India (PM-SHRI) Scheme to transform 14,500 schools into model institutions to achieve the objectives of National Education Policy, 2020.

What is the scheme?

 What is the issue?

Increase in violent crimes, suicides in NCRB’s Crime in India report 2021 points to indirect consequences of pandemic.

What is NCRB ?

Why in news?

India’s biggest ever spectrum auction ended with bids upwards of Rs 1.5 lakh crore.

How much spectrum was bought by the applicants?

• A total of 51.2 GHz of spectrum was sold of the total 72 GHz that was up for grabs – close to 71%.
• The total spectrum sold was good enough for covering all circles in the country, estimating good coverage of 5G in the next two-three years.
• At Rs 1.5 lakh crore, the final total bids have exceeded expectations, surpassing the government’s internal estimates of receiving bids of around Rs 1 lakh crore.
• Reliance Jio emerged as the largest spender in the 5G spectrum auction, acquiring almost half of all the airwaves sold for more than Rs 88,000 crore.
• All the bands were sold at base price, except for the 1,800 MHz band.

Reason behind the auction fetching more cash than estimated

 Why in news?

The Election Laws (Amendment) Bill 2021 has been passed in both houses of Parliament enabling the linking of electoral roll data with the Aadhaar ecosystem.

What is the government's rationale?

• A Parliamentary Standing Committee report on demands of grants of the Law Ministry released on March 2021 has been advocating linkage of unique Aadhaar number with voter I-card
• Now proposal has been unanimously approved by the Parliamentary Committee on Law and Justice.
• But, it is not clear if the specifics of the Bill had been discussed widely and public opinion sought.
• Supreme Court judgement - In March 2015, the Election Commission had started a National Electoral Roll Purification and Authentication Programme
• It has sought to link Aadhaar to voter IDs, in a bid to delete duplicated names.
• That year, the Supreme Court made it clear that Aadhaar card Scheme is purely voluntary and it cannot be made mandatory till the matter is finally decided by this Court.
• Now EC had issued necessary instructions to the Chief Electoral Officers (CEOS) of the States/UTs specifying that furnishing of Aadhaar number by electors is not mandatory and it is only optional.

How would the reforms benefit the people?

 Why in news?

The ‘Report of the Working Group on Digital Lending including Lending through Online Platforms and Mobile Apps’ has been released by the RBI.

What is digital lending?

• Digital lending is the process of availing credit online
• Digital lending is mostly preferred by those who are generally not able to avail any credit through the formal sources of finance like banks.

What digital lending models have been in place?

• Presently, there are three digital-lending models seen through the regulatory-approach lens.
• Bank/NBFC-owned digital platforms – They operate under the direct regulatory purview of RBI.
• Fintech companies’ proprietary digital platforms  - They work in partnership with banks/NBFCs, typically under an outsourcing arrangement to support sourcing of borrowers, assess creditworthiness using alternative data and recover the dues.
• Being mere intermediaries, these platforms are not required to seek any registration with RBI and are only indirectly regulated through RBI’s outsourcing guidelines applicable to Banks/NBFCs.
• Peer-to-peer (P2P) lending platforms - They usually involve the otherwise unregulated retail lenders.
•  RBI has mandated such platforms to seek registration as NBFC-P2P and thus they are directly regulated by RBI.

What is the significance of digital lending?

• Instant disbursal of funds
• Customer friendly application
• Paperless process
• Transparent and simplified process
• Reasonable interest rates
• Ensure swift payback
• Reduced credit gap
• Operating cost effieciency
• Financial inclusion – Example- JAM (Jan Dhan-Aadhaar-Mobile) trinity

What are the concerns of digital lending?

• Unauthorised lenders
• Exorbitant rates of interest
• Use of coercive repayment methods
• Non consensual collection of user data

RBI report finds 600 illegal loan apps operating in India which are available on several app stores for Android users.

What are the key recommendations on digital lending?

• The working group was set up on January 13, 2021 with Jayant Kumar Dash, Executive Director of RBI as the Chairman.
• Loan servicing - The balance-sheet lending through the apps should be restricted to RBI-regulated entities.
• All loan servicing should be executed directly in a bank account of the balance-sheet lender and disbursements should always be made into the bank account of the borrower.
• Nodal agencies - Nodal agencies must be set up to run digital lending applications through stringent verification processes .
• Legislative measures - The group has recommended that in the medium term, the government may consider bringing in legislation to prevent illegal lending activities by introducing the ‘Banning of Unregulated Lending Activities Act’.
• Technology standards - Certain baseline technology standards should be developed when it comes to digital lending apps and compliance with those standards as a pre-condition.
• Algorithmic features used in digital lending has to be documented to ensure transparency.
• The group recommends that auditable logs should be kept for every action that a user performs on the app and that every fintech app must be signed/ verified in a secured manner.
• Data collection and usage - Data should be collected from the borrower with prior information on the purpose, usage and implication of such data and with the explicit consent.
• All such data must be stored in servers located in India.
• Reporting of lending activities - Lending by regulated entities (REs) through lending apps must be reported to credit bureaus.
• And only regulated entities can access bureau data for the purpose of collecting or reporting data on behalf of borrowers.
• Interest calculation - Interest must be calculated on the basis of the actual number of days and no prepayment penal rate of interest for short-term consumer credit.
• Shaping  the Self- Regulatory Organisations (SRO)- Standardised code of conduct for recovery to be framed by the proposed SRO in consultation with RBI.
• The group recommended the maintenance of a ‘negative list’ of Lending Service Providers by the proposed SRO.

What does the draft rule imply?

 Why in news?

The Trade Policy Forum (TPF), a premier forum to resolve trade and investment issues between India and the United States has been re-launched after four long years.

What is the status of India-US bilateral trade?

• The US remained India’s biggest trading partner and largest export market and the bilateral trade exploded from approximately 20 billion dollars in 2001 to over 145 billion dollars in 2019.
• The US investment in India amounts to 46 billion dollars.
• Over 2,000 US companies are located in India, including every major Fortune 500 companies.
• Over 200 Indian companies created about 125,000 jobs in United States across all states.
• The US is one of the few countries with which India has a trade surplus with India’s exports exceeding the imports.
• The top traded goods include pearls and precious stones, pharmaceuticals, machinery, electronics, clothing, vehicles, chemicals and fish products, optical, photo, medical apparatus and aluminium.

What are the key issues in the bilateral trade relations?

 What is the issue?

The United States’ Labor Department reported that retail inflation had spiked to 6.2 % in October whereas India’s National Statistical Office data showed that retail inflation rose to 4.5 % for the same month.

What is inflation rate?

• It is the rate at which prices increase over a given period.

• In India, the inflation rate is calculated on a year-on-year basis.

• A high inflation rate erodes the purchasing power of people.

• Since the poor have less money to withstand fast-rising prices, high inflation hurts them the hardest.

What has caused the inflation surge in the US?

 Why in news?

The Glasgow Climate Pact (of COP 26)  was adopted recently and it is a mixed bag of modest achievements and disappointed expectations.

What are the modest achievements of the Summit?

• Average global temperature - The achievements include a clear consensus on a target of keeping global temperature rise down to 1.5 degrees Celsius.
• The notional target of 2 degrees of the Paris Agreement remains but the international discourse is now set in the more ambitious target.
• Transition from fossil fuels - It is the first clear recognition of the need to transition away from fossil fuels by phasing down the use of coal.
• Importance of Adaptation – Adaptation attained greater significance and there is a commitment to double the current finance available for this to developing countries.
• A start is being made in formulating an adaptation plan and this puts the issue firmly on the Climate agenda.
• Global Methane Pledge - Methane is a significant greenhouse gas with 28 to 34 times higher temperature forcing quality than carbon but stays in the atmosphere for a shorter duration.
• An agreement is signed among 100 countries to cut methane emissions by 30 % by 2030.
• Ending deforestation - A group of 100 countries has agreed to begin to reverse deforestation by 2030.
• Since the group includes Brazil and Indonesia where large areas of forests are being ravaged by legal and illegal logging, there will be progress in expanding these carbon sinks on the planet.
• US-China Joint Declaration on Climate Change - It implies that both the countries are moving towards a less confrontational and more cooperative relationship overall.
• India’s commitments – The commitment to achieve net-zero carbon by 2070 and of enhanced targets for renewable energy were welcomed.
• Clarity on Article 6 of Paris agreement- There is greater clarity on how bilateral carbon trades can proceed and the creation of a centralised hub that replaces Kyoto Protocol’s Clean Development Mechanism.
• Criteria have been set out for countries to use CERs from projects registered after January 1, 2013 to meet their first NDC or first adjusted NDC.
• It also designates a 12-member Supervisory Body to oversee the emerging hub and to review the baselines of recognised credits.

Article 6 of the Paris Agreement introduces provisions for using international carbon markets to facilitate fulfilment of Nationally Determined Contributions (NDCs) by countries.

What are the major disappointments of the Summit?

 What is the issue?

The net zero campaign has been gaining momentum as a number of countries and non-state actors are pushing for the world’s carbon dioxide emissions to reach net zero.

What targets have been set by the countries towards net zero emissions?

IPCC AR6 emphasised that to keep temperature rise within 1.5°C, global emissions should be reduced by 45% from 2010 levels by 2030, on the way to net zero 2050.

• Developed countries – Countries such as the U.S., UK and Australia have committed to to achieve the goal of net zero GHG emissions by 2050.
• Developing countries – Countries such as China have pledged to achieve net zero emissions by 2060.
• India hasn’t set any  net zero target so far.
• Non state actors - Race To Zero is a UN-led campaign is asking cities, businesses, universities, and more to hit net zero emissions.

Can net zero contain the global temperature rise within 1.5°C?