Daily Current Affairs

7.3% of Indians owned digital currency in 2021, 7th highest in world: UN (GS Paper 3, Science and Tech)

Why in news?

• Over seven per cent of India's population owns digital currency, according to the UN, which said that the use of cryptocurrency rose globally at an unprecedented rate during the COVID-19 pandemic.

Top users of cryptocurrencies:

• The UN trade and development body UNCTAD said that in 2021, developing countries accounted for 15 of the top 20 economies when it comes to the share of the population that owns cryptocurrencies.
• Ukraine topped the list with 12.7 per cent, followed by Russia (11.9 per cent), Venezuela (10.3 per cent), Singapore (9.4 per cent), Kenya (8.5 per cent) and the US (8.3 per cent).
• In India, 7.3 per cent of the population owned digital currency in 2021, ranking seventh in the list of top 20 global economies for digital currency ownership as share of population.

 

“All that glitters is not gold: The high cost of leaving cryptocurrencies unregulated”:

• Global use of cryptocurrencies has increased exponentially during the COVID-19 pandemic, including in developing countries.
• In three policy briefs published, it said that while these private digital currencies have rewarded some and facilitate remittances, they are an unstable financial asset that can also bring social risks and costs.
• The policy brief titled “All that glitters is not gold: The high cost of leaving cryptocurrencies unregulated” examines the reasons for the rapid uptake of cryptocurrencies in developing countries, including facilitation of remittances and as a hedge against currency and inflation risks.
• It said that recent digital currency shocks in the market suggest that there are private risks to holding crypto, but if the central bank steps in to protect financial stability, then the problem becomes a public one.
• If cryptocurrencies become a widespread means of payment and even replace domestic currencies unofficially (a process called cryptoisation), this could jeopardise the monetary sovereignty of countries, it said.
• In developing countries with unmet demand for reserve currencies, stablecoins pose particular risks. For some of these reasons, the International Monetary Fund has expressed the view that cryptocurrencies pose risks as legal tender.

 

“Public payment systems: Responding to the financial stability and security-related risks of cryptocurrencies”:

• The policy brief titled “Public payment systems in the digital era: Responding to the financial stability and security-related risks of cryptocurrencies” focuses on the implications of cryptocurrencies for the stability and security of monetary systems, and to financial stability.
• It is argued that a domestic digital payment system that serves as a public good could fulfil at least some of the reasons for crypto use and limit the expansion of cryptocurrencies in developing countries, it said, adding that depending on national capabilities and needs, monetary authorities could provide a central bank digital currency or, more readily, a fast retail payment system.
• Given the risk of accentuating the digital divide in developing countries, UNCTAD urges authorities to maintain the issuance and distribution of cash.

 

How cryptocurrencies can undermine domestic resource mobilisation in developing countries?

• The policy brief titled, “The cost of doing too little too late: How cryptocurrencies can undermine domestic resource mobilisation in developing countries” discusses how cryptocurrencies have become a new channel undermining domestic resource mobilisation in developing countries.
• While cryptocurrencies can facilitate remittances, they may also enable tax evasion and avoidance through illicit flows, just as if to a tax haven where ownership is not easily identifiable.
• In this way, cryptocurrencies may also curb the effectiveness of capital controls, a key instrument for developing countries to preserve their policy space and macroeconomic stability.

 

Way Forward:

• UNCTAD urged authorities to take actions to curb the expansion of cryptocurrencies in developing countries, including ensuring comprehensive financial regulation of cryptocurrencies through regulating crypto exchanges, digital wallets and decentralised finance, and banning regulated financial institutions from holding cryptocurrencies (including stablecoins) or offering related products to clients.
• It also called for restricting advertisements related to cryptocurrencies, as for other high-risk financial assets; providing a safe, reliable and affordable public payment system adapted to the digital era; implementing global tax coordination regarding cryptocurrency tax treatments, regulation and information sharing and redesigning capital controls to take account of the decentralised, borderless and pseudonymous features of cryptocurrencies.

 

Taj Mahal won’t be illuminated for Independence Day

(GS Paper 1, Culture)

Context:

• The government's Har Ghar Tiranga campaign has people coming out in hordes, waving the national flag. And almost every monument in India is illuminated as the 75th Independence Day draws close.
• The Centre, state governments, and even private establishments have decided to light up buildings with tricolour lights. 
• However, one of the wonders of the world, Agra's Taj Mahal will have to suffice with natural light.
• The Supreme Court has passed a directive to protect the monument and one of the measures involved a ban on lighting it at night.

 

When was the Taj last lit up?

• The Taj Mahal was one of the first monuments in the country to be lit up after sundown. About 77 years ago, a grand celebration was held inside the monument by military personnel for winning World War II. It is during this celebration that the Taj Mahal was illuminated with floodlights.
• A few low-level security lighting posts were installed at the World Heritage Site in 2015 with the twin purpose of illuminating the Taj and wooing tourists at night.
• However, what has stayed in mind is when renowned pianist Yanni performed on 20 March 1997 and the illuminated Taj made for the perfect backdrop, as hundreds watched in awe. Lit up in pink, blue, and yellow, it was a riot of colours.

 

An insect Attack:

• But once the concert was over and the morning dawned, it brought with it problems of its own. The following morning, the Taj Mahal was ridden with dead insects. According to the chemical wing of the ASI, they had damaged the white marble of the monument.
• The insects were drawn by the lights and as these insects sat on the floors and walls, they defecated on the marble structure’s surface. This left a coloured pigment which eroded the marble.
• After Yanni’s concert, the Supreme court imposed restrictions saying no programmes should be held in the 500- metre area around the monument.

 

Experts view:

• Heritage experts have expressed concerns over the illumination of the monument time and again, saying the lights attract insects, which may jeopardise the structure of the Taj.
• A study was conducted in the mid-90s which rejected the proposal to illuminate the monument, citing harm to its surface.
• Taj Mahal does not need lighting at all. It is a marble structure and can be seen in all its glory in natural night. It is absolutely unwise to illuminate it with artificial lighting, which attracts insects.

 

Environmental threats:

• In 2018, the white marble of the Taj Mahal was found turning yellow and green because of high levels of pollution in Agra. The stagnation of the Yamuna River was causing algae deposits on the surface of the Taj, which has left ASI in worry.
• In 2018, the Supreme Court slammed the Uttar Pradesh government for not taking enough measures to preserve the monument.  A year later, it once again asked the state to file a fresh vision document, detailing the manner in which the monument would be preserved and protected.
• A few months later it warned that there will be no “second chance” to preserve the Taj Mahal.

 

About Taj Mahal:

• The Taj Mahal, which was constructed in 1632 by Emperor Shah Jahan in memory of his wife Mumtaz Mahal, had been initially named 'Roza-e-Munavvara' which means Unique Building, but was then renamed by Shah Jahan as Taj Mahal as a loving tribute to his wife for whom his love surpassed all belief.
• The Taj was constructed when Shah Jahan's most beloved wife Arzumand Banu Begum, popularly known as Mumtaz Mahal, died giving birth to her 14th child near Burhanpur in Madhya Pradesh where she had been accompanying Shah Jahan on one of his military campaigns. Mumtaz died at the age of 39.
• The Taj had been designed by Ustad Ahmad Lahori and Ustad Abdul Karim, which was approved by Shah Jahan.
• The Taj was declared World Heritage building in 1983.

 

Survey data on poverty and broad policy pointers

(GS Paper 3, Economy)

 

Context:

• Based on multidimensional poverty measurement, the Poverty Ratio (Head Count Ratio) in Tamil Nadu declined from 4.89% in 2015-16 to 1.57% in 2020-21, based on the fourth and fifth rounds of the National Family Health Survey (NFHS) data.
• Academics have questioned the quality of NFHS data for various reasons, based on the previous four rounds of NFHS databases. Such questions may be raised against the NFHS 5 database also.

On the MPI:

• NITI Aayog, armed with a fairly large sample survey data of NFHS 4 (with more than six lakh households in India), estimated the Multidimensional Poverty Index (MPI) and published the baseline report in 2021.
• The rationale for the MPI was derived from the concept that poverty is the outcome of simultaneous deprivations in multiple functions such as attainments in health, education, and standard of living.
• The NITI Aayog identified 12 indicators in these three sectors and calculated the weighted average of deprivations in each of these 12 indicators for all men and women surveyed in NFHS 4.
• If an individual’s aggregate weighted deprivation score was more than 0.33, they were considered multi-dimensionally poor.
• The non-poor may also be deprived in a few of these indicators, but not as much to be classified as multi-dimensionally poor.
• The proportion of the population with a deprivation score greater than 0.33 to the total population is defined as the Poverty Ratio or Head Count Ratio.
• The authors have estimated the MPI and its components for Tamil Nadu using NFHS 5 and compared it with the estimates based on NFHS 4 given by NITI Aayog.
• Another interesting aspect of this approach is the estimation of the Intensity of Poverty. This is the weighted-average deprivation score of the multi-dimensionally poor.

 

Case of Tamil Nadu:

• For instance, the Intensity of Poverty in Tamil Nadu declined from 39.97% to 38.78% during this period, indicating that the summary measure of multiple deprivations of the poor has only marginally declined in these five years, and has to be underlined for policy focus.
• The MPI is a product of Head Count Ratio and Intensity of Poverty. The MPI for Tamil Nadu declined from 0.020 to 0.006. This sharp decline in MPI is largely due to a greater decline in Head Count Ratio compared to Intensity of Poverty.
• This gives a clue that any further decline in MPI in Tamil Nadu should happen only by addressing all the dimensions of poverty and reducing its intensity substantially across the State.

 

Direction of intervention:

• The deprivation estimation also indicates that the overall population that has been identified as deprived in most of the indicators individually is higher than the population identified as multidimensionally poor.
• This once again reiterates the point that people may be deprived severely in a few functions, but may not be multidimensionally poor. This adds another aspect of public policy intervention, i.e., attacking poverty in Tamil Nadu should not only be multidimensional but also universal.
• Only this approach can address deprivations in all the indicators. This will also surely and squarely reduce the Intensity of Poverty in Tamil Nadu.
• Statistically, the Head Count Ratio and Intensity of Poverty can be calculated for each district and segregated by gender, rural and urban, and other dimensions.
• Therefore, the usefulness of the MPI and its components is enormous in terms of understanding poverty in its totality as well as the granular details that are essential for sectoral and spatial policy and programmatic interventions.
• The strength of the MPI as an instrument for data-driven public policy depends on the quality of survey data, namely the NFHS data.

 

Quality of NFHS data:

• The quality of survey data has been widely debated in academia. The National Sample Survey Organisation’s (NSSO) sample surveys have been debated among economists and statisticians, both in terms of sampling and non-sample errors, right from its initial days in the 1950s.
• Following several review reports on the NSSO’s methodologies, the NSSO has been attempting to improve sampling design and reduce non-sampling errors, particularly with reference to recall periods for providing consumption expenditure by households. All these are well documented.
• Demographers have done a different kind of quality check for NFHS 5 data for Tamil Nadu. For instance, in Tamil Nadu, the NFHS data was collected in two time periods: 8,382 households (30%) in the pre-pandemic period and 19,547 households (70%) in the post-lockdown period, aggregating to 27,929 households for the State.
• The combined survey data from two different time periods separated by a major pandemic have to be approached with caution while interpreting the statistics derived from the entire database.
• Assuming that survey data are from a single time period, it is normal to compare the results of survey data on specific indicators, with the programmatic data derived from official records.
• There are claims that the deprivation indicators in terms of drinking water and sanitation are on a higher level in Tamil Nadu than the claims made by the respective State government departments. Such issues are common in survey data.
• For instance, consumption expenditure on foodgrain derived from NSSO data would not be in agreement with the estimation of food consumption, as per the System of National Accounts.

 

Data use and quality:

• The quality of survey data has always been a contentious issue in academic and policy debates for various (well-founded) reasons. However, this has not stopped academicians and policymakers from inferring policy directions because such data at a reasonably aggregate level (say at the level of a State), should be useful.
• As mentioned earlier, in Tamil Nadu, the sharp decline in Head Count Ratio and a marginal decline in Intensity of Poverty in NFHS 5 compared to NFHS 4, cannot be brushed aside.
• From this, it can be inferred that in order to reduce the Intensity of Poverty, there is need to address deprivations across the entire population, that is there should be a universal approach instead of a targeted approach to addressing it.

 

Way Forward:

• The survey data gives only broad policy pointers whereas programmatic interventions should be curated with ground-level realities. At the same time, continuous engagement with survey data in terms of improving the sample design and response quality has to be sustained.
• Analysing the data and finding the incongruence of inferences from different databases on an issue would help improve data gathering systems.

 

Criminal Procedure (Identification) Act, 2022

(GS Paper 2, Governance)

 

 

Why in news?

• The Criminal Procedure (Identification) Act, 2022 provides legal sanction to law enforcement agencies for “taking measurements of convicts and other persons for the purposes of identification and investigation of criminal matters”.
• While the legislation was enacted earlier in 2022, the Ministry of Home Affairs notified it to come into effect from August 4, 2022. It also repeals the existing Identification of Prisoners Act, 1920.

 

What is the use of identification details in criminal trials?

Measurements and photographs for identification have three main purposes:

1. To establish the identity of the culprit against the person being arrested,
2. To identify suspected repetition of similar offences by the same person and
3. To establish a previous conviction.

 

What was the previous Identification of Prisoners Act, 1920?

• Even though the police has powers of arrest, mere arrest does not give them the right to search a person. The police requires legal sanction to search the person and collect evidence. These legal sanctions are designed so as to maintain a balance between the rights of an individual and the interests of society in prosecution and prevention of offences.
• The Identification of Prisoners Act, 1920 became a necessity when the recording of newer forms of evidence such as fingerprints, footprints and measurements started becoming more accurate and reliable. 

 

What was the need to replace this Act?

• Over the years, the need to amend/update the Identification of Prisoners Act, 1920 has been voiced several times. In 1980, the 87th Report of the Law Commission of India undertook a review of this legislation and recommended several amendments.
• This was done in the backdrop of the State of UP vs Ram Babu Misra case, where the Supreme Court had highlighted the need for amending this law.
• The first set of recommendations laid out the need to amend the Act to expand the scope of measurements to include “palm impressions”, “specimen of signature or writing” and “specimen of voice”. The second set of recommendations raised the need of allowing measurements to be taken for proceedings other than those under the Code of Criminal Procedure (CrPC).
• The Law Commission Report also notes that the need for an amendment is reflected by the numerous amendments made to the Act by several States.

 

What are the main highlights and differences in both the legislations?

• Like the Identification of Prisoners Act, 1920, the new Criminal Procedure (Identification) Act, 2022 provides for legal sanction to law enforcement agencies for the collection of measurements.
• The purpose is to create a useable database of these measurements. While at the State level, each State is required to notify an appropriate agency to collect and preserve this database of measurements, at the national level, the National Crime Records Bureau (NCRB) is the designated agency to manage, process, share and disseminate the records collected at the State level.

 

What are some of the concerns with the present legislation?

• Since the Identification of Prisoners Act, 1920 was a colonial legislation, its duplication in the Criminal Procedure (Identification) Act, 2022, a post-independence legislation has raised some concerns related to the protection of fundamental rights.
• The legislation comes in the backdrop of the right to privacy being recognised as a fundamental right. A fundamental facet of the right to privacy is protection from the invasion of one’s physical privacy.
• As per the Puttaswamy judgment, for a privacy intrusive measure to be constitutional, there is a need for the measure to be taken in pursuance of a legitimate aim of the state, be backed by the law and be “necessary and proportionate” to the aim being sought to be achieved.
• In this case, while the first two tests are satisfied, as “prevention and investigation of crime” is a legitimate aim of the state and “measurements” are being taken under a valid legislation, the satisfaction of the third test of necessity and proportionality has been challenged on multiple counts.

 

Vague Measurements:

• First, while the need for expansion of the “measurements” that can be taken is well justified, the inclusion of derivative data such as “analysis” and “behavioural attributes” have raised concerns that data processing may go beyond recording of core “measurements”. That is some of these measurements could be processed for predictive policing.
• While this is a legitimate concern, and purposes for which the “measurements” can be processed need to be better defined, merely recording core measurements without conducting the required forensics on them would severely limit the usability of these “measurements”.
• Second, unlike the Identification of Prisoners Act, 1920 which provided that “measurements” will be taken for those either convicted or arrested for offences that entail imprisonment of one year or upwards, the current law allows for “measurements” to be taken if a person has been convicted/arrested for any offence, including petty offences.
• The necessity of taking measurements of such persons for investigation of offences is unclear, and such discretion is likely to result in abuse of the law at lower levels and overburdening of the systems used for collection and storage of these “measurements”.
• Given that these records will be stored for 75 years from the time of collection, the law has been criticised as being disproportionate.

 

Mass surveillance:

• The new legislation allows that a person who has been arrested for an offence that is punishable by less than seven years of imprisonment, and is not an offence against women and children, “may not be obliged to allow taking of his biological samples”.
• This is definitely an improvement over the earlier law which did not allow for any such refusal. It also helps allay concerns of disproportionate collection.
• However, given the option to not submit for “measurements” is limited to biological samples and is available at the discretion of the police officer, this exception provides restricted relief.
• Another worry expressed by experts is that such collection can also result in mass surveillance, with the database under this law being combined with other databases such as those of the Crime and Criminal Tracking Network and Systems (CCTNS).

 

Right against self-incrimination:

• Lastly, concerns are being raised that the present law violates the right against self-incrimination enshrined in Article 20(3) of the Constitution of India. However, this argument is nebulous since the Supreme Court has already settled this point.
• In the State of Bombay vs Kathi Kalu Oghad, the Supreme Court had conclusively held that “non-communicative” evidence i.e. evidence which does not convey information within the personal knowledge of the accused cannot be understood to be leading to self-incrimination. Therefore, no challenge lies to the law on this ground.

 

What is the way ahead?

• The Opposition has raised objections to a law of such import not being submitted for public consultation or referred to parliamentary standing committees, as was done for the DNA Technology (Use and Application) Regulation Bill, 2019 which has benefited from such scrutiny.
• The Central government has responded to the criticisms of the law stating that privacy and data protection related concerns will be addressed in the Rules formulated under the legislation and through model Prison Manuals that States can refer to.
• The immediate future of this law is unclear. A writ petition has been filed challenging the constitutionality of the law before the Delhi High Court. The court has issued notice to the Central government for filing a reply.