Current Affairs 06 April 2023

CONTENTS

1. NPCI’s new circular on levy charges
2. World Energy Transitions Outlook report
3. Open-source seeds movement
4. Lumpy skin disease
5. Finland joined NATO

NPCI’s New Circular On Levy Charges

Context:

The National Payments Corporation of India (NPCI), which governs UPI, in a circular issued directly to banks, intimated that they can now levy charges on merchant transactions made through Prepaid Instrument wallets using UPI.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

1. Details
2. What are PPIs?
3. What is PPI interoperability?
4. How does PPI interoperability through UPI work?
5. Do merchants have to pay for accepting wallet transaction on UPI?

Details:

• After the information was leaked to the media, the NPCI issued a clarification stating that normal bank-to-bank UPI transactions will not be charged and that customers will not have to pay for transactions made via PPI on UPI.
• It said that the new interchange charges are only applicable for Prepaid Payment Instruments’ (PPI) merchant transactions.
• The interchange fee, generally associated with card payments to cover the transaction cost, has now brought PPI wallets also under its fold.

What are PPIs?

• Prepaid Payment Instruments (PPIs) are payment methods that can be used to purchase goods and services and send/receive money by using the stored value in the wallet.
• Users have to pre-load the wallet with a desired amount. The amount can be loaded/reloaded against cash or through debit to bank account, or by using credit/debit cards, UPI, or any other approved payment method in India.
• PPIs can only be used in Indian rupees. PPIs can be in the form of mobile wallets, physical smart cards, secure tokens, vouchers, or any other method that allows access to prepaid funds.

What is PPI interoperability?

• Previously, to use PPI at any merchant, it was necessary that the concerned merchant was engaged directly by the specific PPI issuer (specific network).
• All PPIs with which the merchant did not have a direct tie-up would get rejected.
• The most prevalent form of PPI used in the country is the mobile wallet, and this restriction meant that customers of one specific mobile wallet could spend the money in the wallet only at specific merchant locations which were directly tied up with the same PPI wallet provider.
• For example, if you had a Paytm or Mobikwik wallet, you could only use it at merchants that accepted Paytm or Mobikwik QR codes.
• To overcome this limitation of PPIs, the RBI has mandated interoperability among different PPI issuers.
• Subsequently, PPI issuers tied-up with NPCI for issuing
  1. interoperable RuPay PPI cards
  2. creating interoperable wallets on UPI rails.
• Prepaid instruments in the form of wallets can now be linked to UPI, thus creating interoperable wallets on UPI rails.

How does PPI interoperability through UPI work?

• After linking one’s PPI wallet to UPI, customers can transact using Scan and Pay on all UPI interoperable QR codes.
• This will enable the use of PPI wallets at all merchant locations.
• The user can also send/receive money to any other wallet user.
• Similarly, a merchant with any UPI QR code can now accept payments from any PPI issuer or mobile wallet.
• PPI on UPI will speed up the growth of merchant transactions in rural areas and further deepen digital financial inclusion by catering to use cases such as healthcare, transit, education, utility bills, etc.

Do merchants have to pay for accepting wallet transaction on UPI?

• The PPI enabled merchants were already paying charges to the PPI issuer for acceptance of mobile wallets or prepaid cards.
• Now the charges are aligned at a network level with some standardisation. However, each merchant can work with their preferred acquiring entity.
• Now, for using prepaid payment instruments (PPIs) such as gift cards, wallets etc for transactions on UPI, an interchange fee of up to 1.1% has been levied from April 1, 2023.
• The charges are applicable if the transaction is more than ₹2,000.
• If you are a merchant and accepting UPI payments from a customer’s bank account, then there are no charges applicable.
• Charges are applicable only if you have accepted or consented for the transactions made using PPI Wallet.
• Officially there are no charges to be paid by the customer. However, merchants may pass on the additional burden to customers by way of price increase or some other means.

-Source: The Hindu

World Energy Transitions Outlook Report

Context:

Recently, the International Renewable Energy Agency (IRENA) released the World Energy Transitions Outlook report.

Relevance:

GS III: Indian economy

Dimensions of the Article:

1. Key highlights of the report
2. About International Renewable Energy Agency (IRENA)

Key highlights of the report:

• The global energy transition is not on track to meet the 1.5 degrees Celsius pathway.
• To keep the 1.5°C target alive, deployment levels need to increase from 3,000 GW currently to over 10,000 GW in 2030, which requires an average of 1,000 GW of deployment annually.
• Public sector intervention is necessary to ensure investments are distributed more equitably across countries.
• Global investments in energy transition technologies reached a record high of $1.3 trillion in 2022, but annual investments must more than quadruple to over $5 trillion to stay on the 1.5°C pathway.
• By 2030, cumulative investments must amount to $44 trillion, with transition technologies representing 80% of the total, or $35 trillion, with a focus on efficiency, electrification, grid expansion, and flexibility.
• Current pledges and plans fall short of the report’s 1.5°C pathway and will result in an emissions gap of 16 gigatonnes (Gt) by 2050.

About International Renewable Energy Agency (IRENA)

• Introduction to IRENA: IRENA is an intergovernmental organization that assists countries in their transition towards a sustainable energy future.
• Establishment and Headquarters: IRENA was established on January 26, 2009, in Bonn, Germany. Its headquarters are located in Abu Dhabi, United Arab Emirates.
• Membership: IRENA has a membership of 167 countries and the European Union, working together to promote the use of renewable energy worldwide.
• India’s Membership: India joined IRENA in 2009 as the 77th Founding Member of the organization.
• UN Observer Status: IRENA is an official United Nations observer, which allows it to participate in UN General Assembly meetings, as well as the United Nations Framework Convention on Climate Change.

-Source: Indian Express

Open-Source Seeds Movement

Context:

Farmers have innovated and shared seeds without any intellectual property rights (IPR) for centuries. They also haven’t sought exclusive rights over seeds and germplasm to prevent others from innovating on the seeds. However, with the emergence of the global IPR regime over plant varieties, there was a dire need to ‘open-source’ seeds.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

1. What are plant-breeders’ rights and patents?
2. How is IP protected in agriculture?
3. What are ‘open-source seeds’?

What are plant-breeders’ rights and patents?

• Plant breeders’ rights (PBR) and patents have been conferred to developers of new plant varieties due to the advent of hybrid seeds and scientific plant-breeding.
• In the U.S. and other national IPR regimes, rights-holders can legally enforce their intellectual property rights (IPR) by demanding royalties on seeds and restricting unauthorised use of seeds to develop new varieties.
• The establishment of the World Trade Organization in 1994 led to a global IPR regime over plant varieties through the Trade-Related IPR Agreement (TRIPS), requiring countries to provide at least one form of IP protection.
• The consolidation of rights in the seed sector has raised concerns about the freedom to innovate as the private sector, rather than public-sector institutions, leads the genetic revolution in agriculture.
• Seeds are mostly availed as hybrids or protected by strong IPRs, unlike the Green Revolution which was spearheaded by public-sector institutions.

How is IP protected in agriculture?

• There are two major modes of IPR protection in agriculture — plant-breeders’ rights and patents.
• Together, they restrict farmers’ rights and the freedom to develop new varieties using germplasm from IP-protected varieties, and have thus increased the number of IP-protected plant varieties.
• The high prices of genetically modified seeds and IP claims triggered many problems and issues, including the State’s intervention in Bt cotton seeds in India.
• As public sector breeding declined and the private sector began to dominate the seed sector, the need for alternatives became keenly felt.
• This is when the success of open-source software inspired a solution.
• In 1999, plant-breeder named T.E. Michaels suggested an approach to seeds innovation based on the principles of open-source software.

What are ‘open-source seeds’?

• In 2002, the concept of open-source seeds was proposed independently by Boru Douthwaite and another individual, which was later developed by scholars and civil society members
• German NGO Agrecol and the US-based open source seeds initiative followed with similar initiatives, each with its own unique approach
• The open-source model aims to promote the free exchange of seeds and plant varieties, with users agreeing not to patent the seeds bought under the license
• In India, the Centre for Sustainable Agriculture (CSA), Hyderabad, developed a model that includes an agreement between CSA and the recipient of the seed/germplasm
• Under India’s Plant Variety Protection and Farmers’ Rights Act 2001, farmers can register ‘farmer varieties’ and have the right to reuse, replant, and exchange seeds, but they cannot breed and trade in varieties protected under the Act for commercial purposes
• The open-source approach has potential applications in farmer-led seed conservation and distribution systems in India, particularly for traditional-variety conservation and sharing initiatives
• Open-source principles can help overcome challenges such as lack of uniformity and poor quality in traditional varieties, by facilitating testing, improvisation, and adoption
• The adoption of open-source seeds has the potential to enhance India’s food security and climate resilience

-Source: The Hindu

Lumpy Skin Disease

Context:

The Mumbai Police have ordered the prohibition of cattle transportation in the city to prevent the spread of the lumpy skin disease (LSD).

Relevance:

GS II: Health

Dimensions of the Article:

1. What is the lumpy skin disease?
2. How does it spread?
3. Symptoms
4. What is the geographical distribution and how did it spread to India?
5. What are the economic implications?

What is the lumpy skin disease?

• Lumpy skin disease is caused by the lumpy skin disease virus (LSDV), which belongs to the genus capripoxvirus, a part of the poxviridae family (smallpox and monkeypox viruses are also a part of the same family).
• The LSDV shares antigenic similarities with the sheeppox virus (SPPV) and the goatpox virus (GTPV) or is similar in the immune response to those viruses.
• It is not a zoonotic virus, meaning the disease cannot spread to humans.

How does it spread?

• It is a contagious vector-borne disease spread by vectors like mosquitoes, some biting flies, and ticks and usually affects host animals like cows and water buffaloes.
• According to the United Nations Food and Agriculture Organisation (FAO), infected animals shed the virus through oral and nasal secretions which may contaminate common feeding and water troughs.
  • Thus, the disease can either spread through direct contact with the vectors or through contaminated fodder and water. Studies have also shown that it can spread through animal semen during artificial insemination.

Symptoms:

• LSD affects the lymph nodes of the infected animal, causing the nodes to enlarge and appear like lumps on the skin, which is where it derives its name from.
• The cutaneous nodules, 2–5 cm in diameter, appear on the infected cattle’s head, neck, limbs, udder, genitalia, and perineum.
• The nodules may later turn into ulcers and eventually develop scabs over the skin.
• The other symptoms include high fever, sharp drop in milk yield, discharge from the eyes and nose, salivation, loss of appetite, depression, damaged hides, emaciation (thinness or weakness) of animals, infertility and abortions.
• The incubation period or the time between infection and symptoms is about 28 days according to the FAO, and 4 to 14 days according to some other estimates.
• The morbidity of the disease varies between two to 45% and mortality or rate of date is less than 10%, however, the reported mortality of the current outbreak in India is up to 15%, particularly in cases being reported in the western part (Rajasthan) of the country.

What is the geographical distribution and how did it spread to India?

• The disease was first observed in Zambia in 1929, subsequently spreading to most African countries extensively, followed by West Asia, Southeastern Europe, and Central Asia, and more recently spreading to South Asia and China in 2019.
• As per the FAO, the LSD disease is currently endemic in several countries across Africa, parts of the West Asia (Iraq, Saudi Arabia, Syrian Arab Republic), and Turkey.
• The spread in South Asia first affected Bangladesh in July 2019 and then reached India in August that year, with initial cases being detected in Odisha and West Bengal.

Is it safe to consume the milk of affected cattle?

• Studies say that it has not been possible to ascertain the presence of viable and infectious LSDV virus in milk derived from the infected animal.
  • However, that a large portion of the milk in Asia is processed after collection and is either pasteurised or boiled or dried in order to make milk powder.
  • This process ensures that the virus is inactivated or destroyed.

What are the economic implications?

• The spread of the disease can lead to “substantial” and “severe” economic losses.
• The disease leads to reduced milk production as the animal becomes weak and also loses appetite due to mouth ulceration.
• The income losses can also be due to poor growth, reduced draught power capacity and reproductive problems associated with abortions, infertility and lack of semen for artificial insemination.
• Movement and trade bans after infection also put an economic strain on the whole value chain.
• A risk assessment study conducted by the FAO based on information available from 2019 to October 2020 revealed that the economic impact of LSD for South, East and Southeast Asian countries “was estimated to be up to $1.45 billion in direct losses of livestock and production”.

India’s Scenario:

• The current outbreak in India has emerged as a challenge for the dairy sector.
• India is the world’s largest milk producer at about 210 million tonnes annually.
• India also has the largest headcount of cattle and buffalo worldwide.
• In Rajasthan, which is witnessing the worst impact of LSD , it has led to reduced milk production, which lessened by about three to six lakh litres a day.
• Reports indicate that milk production has also gone down in Punjab owing to the spread of the disease.
• According to FAO, the disease threatens the livelihoods of smaller poultry farmers significantly.
• Notably, farmers in Uttar Pradesh and Punjab have incurred losses due to cattle deaths and are seeking compensation from their State governments.

-Source: The Hindu

Finland Joined NATO

Context:

Recently, Finland joined NATO, marking a definitive shift in Europe’s post World War II alignment and isolating Russia further. 

Relevance:

GS II: International Relations

Dimensions of the Article:

1. Why has Finland joined NATO?
2. What is NATO?
3. Finland-Russia Ties and History
4. Significance of Finland joining NATO:

Why has Finland joined NATO?

• Russia going to war against Ukraine has made its smaller neighbours crave the powerful military backing the NATO offers, under whose charter, every member has to defend any one member being attacked.
• Finland and its neighbour Sweden applied for NATO membership soon after the Russian invasion of Ukraine. Any new applicant has to be approved by all existing members of the alliance, and while Finland is now the 31st NATO member, Sweden’s bid is being held up by Turkey and Hungary.
• NATO was set up after World War II with the express purpose of containing the Soviet Union.

What is NATO?

• The North Atlantic Treaty Organisation, or NATO, is a political and military alliance of  European countries and two countries in North America (United States and Canada).
• It was set up in 1949 by the US, Canada, and several western European nations to ensure their collective security against the Soviet Union.
• It was the US’s first peacetime military alliance outside the western hemisphere.
• Thirty countries are currently members of NATO, which is headquartered in Brussels, Belgium.
• The headquarters of the Allied Command Operations is near Mons, also in Belgium.
• The members of the alliance include: since 1949, the 12 founding countries of Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the United Kingdom and the United States; Greece and Türkiye joined in 1952; Germany in 1955; Spain in 1982; Czechia, Hungary and Poland in 1999; Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia joined in 2004; Albania and Croatia in 2009; Montenegro in 2017; North Macedonia in 2020; and finally, Finland.

What is important about NATO’s collective defence?

• Members of NATO are committed to mutual defence in response to an attack by any external party.
• Collective defence lies at the very heart of NATO, “a unique and enduring principle that binds its members together, committing them to protect each other and setting a spirit of solidarity within the Alliance”.
• This is laid out in Article 5 of the North Atlantic Treaty, the founding treaty of NATO.

Article 5 reads: “The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all and consequently they agree that, if such an armed attack occurs, each of them, in exercise of the right of individual or collective self-defence recognized by Article 51 of the Charter of the United Nations, will assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area.”

Finland-Russia Ties and History

• During the Soviet era, Finland avoided actions that could strain relations with its powerful neighbour.
• After the Winter War of 1939-40, Finland signed a treaty with the Soviet Union, ceding territories to keep Leningrad safe during WWII.
• After WWII, Finland remained neutral and avoided joining Western military alliances to respect Soviet security interests.
• Despite building closer ties with the West, Finland refrained from joining NATO to avoid provoking Russia.
• Finland maintains preparedness for potential invasion by Russia through compulsory military service, regular disaster training, and defense spending equivalent to the 2% of GDP NATO target.
• The recent Russian invasion of Ukraine has led to Finland’s interest in NATO membership, along with its neighbor Sweden, due to the powerful military backing offered under NATO’s charter.

Significance of Finland joining NATO:

Importance for Finland:

• Provides powerful military backing from NATO in case of an attack from Russia.
• May have a negative impact on trade and tourism revenue from Russia.
• May strain relations with Moscow and lead to loss of Finland’s special voice in international affairs.

Importance for NATO:

• Brings in a military trained to repel an attack from Russia.
• Doubles the border with Russia, bringing the alliance in a better position to station weapons closer to Russia.

Importance for Russia:

• Brings NATO closer to its doors, which it strongly opposes.
• Raises the risk of the Ukraine conflict escalating further, according to Russian Defence Minister Sergei Shoigu.
• May lead to Russia strengthening its military capacity in its west and northwest.

-Source: Indian Express