CRDI announces IRAF at COP27, NPCI introduces open cources license, Soil carbon sequestration

CDRI announces IRAF at COP27

The Coalition for Disaster Resilient Infrastructure (CDRI) announced the Infrastructure Resilience Accelerator Fund (IRAF), a CDRI multi-partner trust fund during the India Pavilion, at the 27th session of the Conference of the Parties (COP27) at Sharm El-Sheikh in Egypt.

More about IRAF

1. The IRAF will enable CDRI to achieve its mandate of resilience through risk-informed investments and infrastructure development resulting in the reduced vulnerability of populations and reduced impact of extreme events and disasters on infrastructure systems.
2. IRAF, a multi-donor trust fund, established with the support of the United Nations Development Programme (UNDP) and United Nations Office for Disaster Risk Reduction (UNDRR), will be managed by the United Nations Multi-Partner Trust Fund Office (UN MPTFO).
3. It will support global action on disaster resilience of infrastructure systems, especially in developing countries and Small Island Developing States (SIDS).
4. Around $50 million in financial commitments have already been announced for IRAF over an initial duration of five years.
5. Supported by the Governments of India, the United Kingdom, Australia, and the European Union, IRAF’s multi-pronged program focus will offer customized technical assistance, capacity building, research, knowledge management, and advocacy across the infrastructure life cycle for countries at all stages of development.

Flashback

1. CDRI was launched by the Prime Minister of India at the UN Climate Action Summit in New York in 2019.
2. CDRI promotes the rapid development of resilient infrastructure to respond to the Sustainable Development Goals’ imperatives of expanding universal access to basic services and enabling prosperity.

What is CDRI?

• The CDRI is an international coalition of countries, UN agencies, multilateral development banks, the private sector, and academic institutions that aim to promote disaster-resilient infrastructure.
• Its objective is to promote research and knowledge sharing in the fields of infrastructure risk management, standards, financing, and recovery mechanisms.
• It was launched by the Indian PM Narendra Modi at the 2019 UN Climate Action Summit in September 2019.
• CDRI’s initial focus is on developing disaster-resilience in ecological, social, and economic infrastructure.
• It aims to achieve substantial changes in member countries’ policy frameworks and future infrastructure investments, along with a major decrease in the economic losses suffered due to disasters.

Its inception

• PM Modi’s experience in dealing with the aftermath of the 2001 Gujarat earthquake” as the chief minister led him to the idea.
• The CDRI was later conceptualized in the first and second edition of the International Workshop on Disaster Resilient Infrastructure (IWDRI) in 2018-19.
• It was organized by the National Disaster Management Authority (NDMA), in partnership with the UN Office for Disaster Risk Reduction (UNDRR), the UN Development Programme, the World Bank, and the Global Commission on Adaptation.

Its diplomatic significance

• The CDRI is the second major coalition launched by India outside of the UN, the first being the International Solar Alliance.
• Both of them are seen as India’s attempts to obtain a global leadership role in climate change matters and were termed as part of India’s stronger branding.
• India can use the CDRI to provide a safer alternative to China’s Belt and Road Initiative (BRI) as well.

Why designated as International Organization?

• Deputing experts to other countries
• Deploying funds globally and receive contributions from member countries
• Making available technical expertise to assist countries
• Imparting assistance to countries in adopting appropriate risk governance arrangements and strategies for resilient infrastructure
• Aligning with the Sustainable Development Goals (SDGs), the Paris Climate Agreement and the Sendai Framework for Disaster Risk Reduction
• Leveraging international engagement to foster disaster-resilient infrastructure at home; and,
• Providing Indian scientific and technical institution as well as infrastructure developers an opportunity to interact with global experts.

NPCI introduces BHIM App open source license

The National Payments Corporation of India (NPCI) introduced the BHIM app open-source license model, under which the source code of the BHIM App will be licensed to regulated entities that do not have a UPI app of their own.

What

1. Currently, a large number of banks do not have a mobile banking app and by licensing the source code of the BHIM app to such banks.
2. NPCI wants to bridge this gap by extending all the readily available features of UPI to these entities which will be an economical and quick-to-market solution for these entities.
3. Presently, these banks are missing out on extending the benefits of the country’s largest retail payment system – UPI, to their customer base.
4. Further, under this model new features that get launched on BHIM App in the future will also be extended to these entities for them to continue accessing the BHIM app’s latest features.

Flashback

1. National Payments Corporation of India (NPCI) was incorporated in 2008 as an umbrella organisation for operating retail payments and settlement systems in India.
2. NPCI was initiated for creating a robust payment and settlement infrastructure in the country.
3. It has changed the way payments are made in India through a bouquet of retail payment products such as Bharat BillPay, RuPay card, Immediate Payment Service (IMPS), Unified Payments Interface (UPI), Bharat Interface for Money (BHIM), BHIM Aadhaar and National Electronic Toll Collection (NETC)
4. An initiative of RBI and IBA, NPCI is focused on bringing innovations in the retail payment systems through use of technology and is relentlessly working to transform India into a digital economy.
5. It is facilitating secure payments solutions with nationwide accessibility at minimal cost in furtherance of India’s aspiration to be a fully digital society.

About National Payments Corporation of India (NPCI)

• National Payments Corporation of India (NPCI), an umbrella organisation for operating retail payments and settlement systems in India, is an initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment & Settlement Infrastructure in India.
• Considering the utility nature of the objects of NPCI, it has been incorporated as a “Not for Profit” Company under the provisions of Section 25 of Companies Act 1956 (now Section 8 of Companies Act 2013), with an intention to provide infrastructure to the entire Banking system in India for physical as well as electronic payment and settlement systems.

Objectives of NPCI

• To offer improved infrastructure for the entire banking industry to create a robust physical and digital payment and settlement system.
• To simplify, merge and incorporate various payment systems with varying standards of coverage into a single national standard uniform and business process for all retail money transactions.
• To design and promote an effective financing process or system that saves time and cost for individuals who make retail transactions on a daily basis.

Products & Services

• National Financial Switch (NFS) – National Financial Switch (NFS) ATM network with 37 member banks and connecting 50,000 ATMs was taken to NPCI’s authority from the Institute for Development and Research in Banking Technology (IDRBT) on 14 December 2009. After taking over, NFS ATM network has grown many folds. As on 31 July 2019, there were 1,140 members with more than 2.41 lakh ATMs connected to the network.
• Unified Payments Interface (UPI) – UPI is a system that makes multiple bank accounts to be accessed from a single mobile application. Users can make instant money transfers through mobile devices round the clock, any day of the year. The technology also features peer-to-peer collect request service with a scheduling facility.
• Immediate Payment Service (IMPS) – Immediate Payment Service (IMPS) lets you transfer money in real-time around the clock, 365 days of the year. At the time of introducing IMPS, consumers only had the NEFT and RTGS facilities that were limited to the bank working hours. NPCI conducted a pilot study of the technology with banks such as SBI, BOI, UBI, and ICICI in August 2010. It was publicly launched on 22 November 2010.
• RuPay – RuPay is a new card payment system launched to satisfy RBI’s vision to offer a domestic, open-loop, and the multilateral system. This made it easier for Indian banks and financial institutions to implement electronic payments. The term ‘RuPay’ is a combination of Rupee and Payment. NPCI also developed RuPay Contactless payments technology using open standards.
• *99# – USSD based mobile banking platform that makes banking services accessible to all the bank account holders on their mobile phones.
• National Automated Clearing House (NACH) – NACH is a web-based solution that facilitates interbank, high volume electronic transactions that are repetitive in nature. They are well suited for bulk transactions towards the distribution of dividends, interest, subsidies, salary, pension, and more.
• Aadhaar Enabled Payment System (AePS) – AePS is a bank-led model that allows online interoperable financial inclusion transaction at PoS of any bank using the Aadhaar authentication through the retail merchant. A customer must provide details such as bank identification, Aadhaar number, and fingerprint to complete such a transaction.
• e-KYC – Electronic way of conducting authentic & real time KYC of a customer using Aadhaar authentication.
• Cheque Truncation System – Electronic image of the cheque is transmitted to the drawee bank by the clearing house, along with relevant information.

SC order in Rajiv Gandhi assassination case

The Supreme Court on 11 November 2022 ordered the premature release of all six remaining convicts – including Nalini Sriharan – who were serving life sentences in the Rajiv Gandhi assassination case. Former Prime Minister Rajiv Gandhi was assassinated on the night of 21 May 1991, at Sriperumbudur in Tamil Nadu by a woman suicide bomber identified as Dhanu, at a poll rally.

What was the basis for the release?

1. The TADA or Terrorist and Disruptive Activities (Prevention) Act trial court had initially sentenced 26 people to death in the case.
2. In 1999, a few years after the TADA Act was allowed to lapse, the Supreme Court upheld the conviction of only seven people, releasing all others. The SC order observed none of those convicted was part of the nucleus of the assassination team.
3. Of the seven convicts serving life terms in the case, in 1999, the Supreme Court sentenced four of them to death and the other three to life imprisonment.
4. In 2000, the death sentence of one, Nalini, was commuted to life. In 2014, the Supreme Court commuted the remaining three death sentences, including that of Perarivalan.
5. On 22 January 2021, the Centre told the Supreme Court that the Tamil Nadu Governor was set to take a call on the release.
6. Then, on 25 January, the Governor’s office left it to President Ram Nath Kovind to take a decision on the pardon of all these convicts. The Centre told the court “the proposal received by the central government will be processed in accordance with the law”.
7. But in May this year, Perarivalan was “set at liberty forthwith” by the Supreme Court, which used its extraordinary powers “for doing complete justice” under Article 142 of the Constitution.

What is Article 142 of the Constitution?

1. Subsection 1 of Article 142 (“Enforcement of decrees and orders of Supreme Court and orders as to discovery, etc.”) says “the Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order prescribe.”
2. Essentially, this provision of the Constitution gives the country’s top court-wide powers to do “complete justice” in a case.

Current Account Deficit Likely To Be Lower At 3% This Fiscal: SBI Report

• A recent report by the State Bank of India said that in contrast to the minimum consensus estimate of 3.5% a reduced current account deficit for this fiscal year of 3% has been projected.
• The report has Cited increased software exports, remittances, and a potential USD 5 billion increase in foreign exchange reserves through swap arrangements.

Highlights of the report

• According to the chief economic advisor at SBI, every $10 increase in oil prices has a 40 basis point impact on the Current Account Deficit (CAD), while the same rise in fuel inflation has a 50 basis point impact and also leads to a 23 basis point fall in growth.
• The CAD has a counter-cyclical shock absorber.
• Exchange rates account for 40% of the fluctuation in software exports, which substantially contributes to their growth.
• If expressed in real terms, every Re 1 decline versus the dollar results in a $250 million rise in software exports.
• Combined with an anticipated $5 billion accrual of currency reserves from swap transactions and higher remittances, this will limit the Current account deficit share of the economy to 3% of GDP, down from the average lowest level projected for the year of 3.5%.
• As swap transactions reverse, the FX reserves, which fell from $642 billion in September 2021 to approximately $531 billion last week, are anticipated to increase by $5 billion.
• The largest influence on CAD comes from oil imports, which account for up to 30% of the nation’s import bills. As a result, any increase in oil price directly affects the trade deficit by raising the cost of imports and widening the CAD.
• Software exports have been increasing, with the percentage of domestic IT services companies’ offsite software exports rising to 88.8% in FY22 from 82.8% five years earlier.

What is the Current Account deficit?

• The current account tracks the inflows and outflows of goods, services, and investments into and out of a country. When the value of goods and services imported exceeds the value of those exported, the country runs a deficit.
• It keeps track of the country’s transactions with other countries.
• When an economy runs a current account deficit, it consumes more than it produces (consumption = domestic consumption + investment + government spending).
• This can only happen when other economies lend their savings to it (via debt or direct/portfolio investment in the economy) or if the economy is depleting its foreign assets, such as its official foreign currency reserve.
• A rising CAD indicates that a country has become uncompetitive, and investors may be unwilling to invest there.
• A current account deficit isn’t always a bad thing. A current account deficit is irrelevant when it is driven by the private sector because it is caused by private sector agents engaging in mutually beneficial trade.
• Current Account = Trade gap + Net current transfers + Net income abroad (Trade gap = Exports – Imports)

Significance of Current Account Deficit

• The current account deficit is a key indicator of competitiveness as well as the level of imports and exports.
• A large current account deficit usually indicates an economic imbalance that must be corrected through exchange rate depreciation and/or improved competitiveness over time.
• A current account deficit is paid for by attracting capital inflows, such as foreigners purchasing domestic assets. This means that foreigners have a stronger claim to assets and dividends.
• Because we are buying from abroad, the Current Account Deficit allows for higher levels of domestic consumption.

Soil carbon sequestration

 International Crops Research Institute for The Semi-Arid Tropics (ICRISAT) has published a modelling study that revealed how the right combination of fertilisers, biochar, and irrigation could potentially increase soil carbon by 300%.

• The study was conducted in some districts of Maharashtra and Odisha with semi-arid climate (annual rainfall 600 -1,100 mm).
• A new gaming app, ‘Mrida’, has been launched to promote behavioural change among farmers and will be released in English, Marathi and Odiya.

About Carbon sequestration:

• Carbon sequestration is the process of capturing and storing atmospheric carbon dioxide.
• The carbon sequestration increased by more than 300 per cent in combination with fertiliser, biochar, and irrigation.
• Biochar is a charcoal-like substance that burns organic material (biomass) from agricultural and forestry wastes in a controlled process called pyrolysis.
• Biochar has safely reduced contamination and stored carbon.
• Biochar increased carbon value in the soil by 130-300 per cent over 30 years with little difference in yield.
• Optimal use of fertilizers increased the carbon and output by up to 30 per cent.
• Improved nutrients, crop/variety, landform, minimum tillage and residue addition led to a significant increase in soil carbon.
• Carbon sequestration increased by 100 kg ha per year with the improved practices of landform management, fertilizers and crop varieties over 45 years.
• Two major types: geologic and biologic
  • Geologic carbon sequestration is the process of storing carbon dioxide (CO2) in underground geologic formations like rocks.
  • Biologic carbon sequestration refers to storage of atmospheric carbon in vegetation, soils, woody products, and aquatic environments.
• Carbon sequestration occurs both naturally and as a result of anthropogenic activities.
• The Kyoto Protocol under UNFCCC allows countries to receive credits for their carbon-sequestration activities in the area of land use, land-use change, and forestry.
• Carbon capture and storage (CCS): carbon dioxide is first separated from other gases contained in industrial emissions. It is then compressed and transported to a location that is isolated from the atmosphere for long-term storage.

• Carbon cycle is as follows:

Significance:

• Food systems account for nearly one-third of greenhouse gas (GHG) emissions.
• In 2015, food-system emissions amounted to 18 Gt CO2 equivalent per year globally, representing 34 per cent of total GHG emissions.
• Soil carbon is critical for crop yield and climate adaptation or mitigation measures, which are heavily reduced by both intensive agriculture and indiscriminate use of chemicals leading to increased carbon emissions.
• Carbon sequestering can provide an additional source of income for the farmers.