01, January 2018

1.Cryptocurrencies are a Ponzi scheme, warns FinMin

Source: The Hindu

The spurt in the prices of Bitcoin and other cryptocurrencies seems to have rung an alarm bell, with the Finance Ministry expressing concern and likening them to Ponzi schemes.

  • The ministry has cautioned against investing in them. Noting the “phenomenal increase” in the price of virtual currencies (VCs), including Bitcoin, in India and globally, “VCs don’t have any intrinsic value and are not backed by any kind of assets.
  • The price of bitcoin and other VCs is entirely a matter of speculation resulting in spurt and volatility in their prices.

Key facts:

  • Virtual currency (VC) transactions are encrypted and are likely being used for terror-funding, smuggling, drug trafficking and money laundering.
  • Besides, VCs are not reliable as they are stored in digital/electronic format, making them vulnerable to hacking and malware attack.

Background:

  • The government of India is yet to introduce regulations covering the digital currency market, but it already created an interdisciplinary committee to research and to develop a regulatory framework for the sector. The committee’s members included the country’s central bank, the Reserve Bank of India (RBI).
  • Meanwhile, the Indian Supreme Court has issued an appeal to the government in November to start the drafting of a regulatory framework to ‘control the flow of Bitcoin’ in the country.
  • Despite its latest warning, the finance ministry has not implemented a total ban on virtual currency trading and has not announced any measures that will curb the adoption and trading of digital currencies in India.

Ponzi Schemes

  • A Ponzi can be any scheme in which the returns to promised to older investors are paid from the money collected from new investors, and not actual profits from the investments. Ponzi schemes were named after Charles Ponzi, a clerk in Boston who, almost a century ago, duped thousands of investors into speculating on phenomenal returns from the humble postage stamp.
  • Those running a Ponzi scheme reel in their first set of investors by introducing them to a great opportunity. They may even pay up the fanciful returns out of their personal funds. But once investors begin to bite, they build a house of cards, using money from the stream of new entrants, to pay the older patrons.
  • Even if profits are made from the investments, more often than not, the scheme operators siphon it off to private accounts. As long as new investors are willing to sign up, the Ponzi scheme works. But when the flow of fresh money dwindles, the house of cards collapses.

2.National Register of Citizens

Source: The Hindu

The much-awaited first draft of the National Register of Citizens (NRC) was published with the names of 1.9 crore people out of the 3.29 crore total applicants in Assam recognising them as legal citizens of India.

  • The NRC is being compiled following a Supreme Court directive to identify illegal immigrants in Assam.

Background:

  • Assam, which faced influx from Bangladesh since the early 20th century, is the only state having an NRC, first prepared in 1951.
  • The Supreme Court, which is monitoring the entire process, had ordered that the first draft of the NRC be published by December 31 after completing the scrutiny of over two crore claims along with that of around 38 lakh people whose documents were suspect.

Issues:

  • The NRC was last updated in Assam way back in 1951. Then, it had recorded 80 lakh citizens in the State. Since then, the process of identification of illegal immigrants in Assam has been debated and become a contentious issue in the State’s politics.
  • A six-year agitation demanding identification and deportation of illegal immigrants was launched by the All Assam Students’ Union (AASU) in 1979. It culminated with the signing of the Assam Accord on August 15, 1985.

NRC:

  • The National Register of Citizens (NRC) contains names of Indian citizens. The NRC was prepared in 1951, after the Census of 1951. It was prepared by recording particulars of all the persons enumerated during that Census.

3.Telecom ombudsman

Source: PIB

A Parliamentary panel has expressed concern over delay in setting up of an ombudsman to deal with consumer grievances in the telecom sector despite the regulator TRAI recommending it twice.

Need:

  • As per the current trends, on an average around 10 million complaints are lodged with the TSPs each quarter and currently complaints are characterised by high volumes, low-value and from users in diverse geographic locations.
  • Therefore, arrangements like ombudsman are required to address to consumers in a speedy manner.
  • This is also necessary keeping in view of the major changes that has taken place in the Indian telecom sector in the recent past.

Proposal:

  • A three-stage grievance redress mechanism for telecom sector is proposed that includes — resolution by telecom service providers (TSPs), resolution by Consumer Grievance Redressal Forum (CGRF) — and determination by Telecom Ombudsman.
  • The ombudsman can be established under rules framed by the Centre, similar to the institution of the insurance ombudsman under the Redress of Public Grievances Rules, 1998 (RPG Rules).
  • The government may, by notification, make rules for carrying out the purposes of this Act. Alternatively, the government can choose to create the ombudsman office through a legislation to be passed by Parliament.

Role of ombudsman:

  • According to the recommendations, the consumer should in the first instance approach the complaint centre of the TSP to seek a solution. It will be the duty of the TSP to look into the request and address the consumer’s concerns within the time frames stipulated by the Authority.
  • In case, the TSP fails to resolve the complaint in a manner that is satisfactory to the consumer; or does not provide a response; or fails to do so within the prescribed time lines laid down by TRAI, the customer will have the option to seek further redress through an independent mechanism. This would consist of a process of a resolution based on fact finding by Consumer Grievance Redressal Forum (CGRF), followed by, if necessitated, determination by the telecom ombudsman.

Funding:

  • A portion of the existing, not in addition, licence fee, is recommended as the funding mechanism for Ombudsman. And in addition to this fixed fee, there will be a variable component payable by each telecom service provider (TSP) depending on the volume of complaints being filed against it and admitted before the ombudsman’s office

Arunachal declared open defecation-free State

Arunachal Pradesh has emerged as the second State in the Northeast, after Sikkim, to be declared Open Defecation Free. Arunachal has 21 districts and the State attained the feat much before the national deadline of October 2, 2019.



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