06, January 2017

  1. Digital push: Demonetisation propels ramping up cyber safety

Source: Indian Express

A National Cyber Coordination Centre, A CERT-In’s Botnet Cleaning and Malware Analysis Centre and the RBI’s circular to banks on phishing attacks are some of the key steps being undertaken to ensure safe and secured digital transactions.

  • The rising proliferation of digital payments in India — with cumulative growth of electronic transactions among various instruments ranging the concomitant dangers on the cybersecurity front have potentially opened up.
  • The Centre, after its announcement of withdrawing high-value currency notes, has also come out with a slew of precautionary measures for any untoward event that might affect the country’s online financial systems.

Issues:

1.On the one hand, the rollout of the first phase of the multi-stakeholder National Cyber Coordination Centre (NCCC) involving the creation of a ‘Threat and Situational Awareness Test Bed’ to generate triggers on existing and potential cybersecurity threats, is being expedited.

2.On the other hand, CERT-In — the Indian Computer Emergency Response Team that acts as a nodal agency in dealing with cyber threats —

  • Is also setting up a Botnet Cleaning and Malware Analysis Centre for detection of computer systems infected by malware and to notify, enable cleaning and securing systems of end users to prevent further malware infections.
  • A digital payments division has also been set up under CERT-In to monitor any potentially harmful activity that occurs on any of the channels on which electronic payments are taking place in the country.
  1. The Reserve Bank of India (RBI), too, is learnt to have issued circulars to all commercial banks on phishing attacks and preventive measures to tackle phishing attacks, alongside advisories relating to fictitious offers of funds transfer etc.

Conclusion

The banks were suggested to increase their capacities to handle the growing electronic payments and at the same time, they were also asked to report all cyber-security related incidents to CERT-In immediately to evolve an adequate response to any attack in time.

    • The government had approved the project to set up the NCCC in April 2015 for implementation by Computer Emergency Response Team (CERT-In) with an outlay of Rs 985 crores for a period of five years.
    • The main focus of the Centre was to continuously scan the cyberspace in the country at metadata level and generate near real time situational awareness for macroscopic views of the cyber security threats in the country.

 

  • NCCC is a multi-stakeholder body with phases of implementation. The first phase for creation of Threat and Situational Awareness Test bed is under implementation.

 

CERT-In:

CERT-In is operational since January 2004. The constituency of CERT-In is the Indian Cyber Community. CERT-In is the national nodal agency for responding to computer security incidents as and when they occur.

In the recent Information Technology Amendment Act 2008, CERT-In has been designated to serve as the national agency to perform the following functions in the area of cyber security:

  • Collection, analysis and dissemination of information on cyber incidents.
  • Forecast and alerts of cyber security incidents
  • Emergency measures for handling cyber security incidents
  • Coordination of cyber incident response activities.
  • Issue guidelines, advisories, vulnerability notes and whitepapers relating to information security practices, procedures, prevention, response and reporting of cyber incidents.
  • Such other functions relating to cyber security as may be prescribed.

 

  1. World Bank holds meet with India on Indo-Pak Indus Treaty

Source: Indian Express

The World Bank had decided to set up a Court of Arbitration (CoA) to settle the disputes following Pakistan’s demand and also agreed to appoint a neutral expert sought by India.

  • India asked the World Bank not to rush in to broker a deal on its dispute with Pakistan over Kishenganga and Ratle project, asserting that the differences can be resolved bilaterally or through a neutral expert.
  • India’s position was conveyed during a meeting World Bank representative Ian H Solomon held with senior officials of External Affairs and Water Resources ministries.

World Bank’s efforts to break the deadlock between the two neighbours on the Kishenganga and Ratle project which are coming up in Jammu and Kashmir.

Dispute over countries projects:

  • The Indian side, led by Joint Secretary in the MEA, gave a presentation on the two projects and insisted that be a neutral expert should look into the issues as objections raised by Pakistan on technical issues, government.
  • India maintained that the design of the projects do not violate the Indo-Pak Indus Water Treaty (IWT). Under the IWT, signed by India and Pakistan in 1960, the World Bank has a specific role of dispute resolution between the two countries.

The World Bank had decided to set up a Court of Arbitration (CoA) to settle the disputes following Pakistan’s demand and also agreed to appoint a neutral expert sought by India.

India had reacted strongly to the decision to appoint the CoA and the World Bank announced it would temporarily halt the two simultaneous processes to resolve the differences.

  1. Financial Stability and Development Council (FSDC: India better placed amidst fragile world economy

Source: PIB

The Union Finance Minister the world economy is quite fragile yet India appears to be much better placed today on the back of improvement in its macro-economic fundamentals.

    • The Finance Minister that the Government’s measures to eliminate the shadow economy and tax evasion are expected to have a positive impact both on GDP and on fiscal consolidation in the long run.

 

  • The Finance Minister was making his Opening Remarks while chairing the Sixteenth Meeting of the Financial Stability and Development Council (FSDC).

 

FSDC

In pursuance of the announcement made in the Union Budget 2010–11 and with a view to strengthen and institutionalize the mechanism for maintaining financial stability and enhancing inter-regulatory coordination, Indian Government has setup an apex-level Financial Stability and Development Council (FSDC).

  • The technical committee under HLCCFM for RBI regulated entities, though at a modest level, had set up a Financial Conglomerate Monitoring Mechanism since 2004. The secretariat of HLCCFM was in Ministry of Finance.

The Chairman of the FSDC is the Finance Minister of India and its members include the heads of the financial sector regulatory authorities (i.e, SEBI, IRDA, RBI, PFRDA and FMC), Finance Secretary and/or Secretary, Department of Economic Affairs (Ministry of Finance), Secretary, (Department of Financial Services, Ministry of Finance) and the Chief Economic Adviser.

Key facts:

  • FSDC discussed about the various initiatives taken by the Government and Regulators for promoting financial inclusion/financial literacy efforts and discussed further measures for promoting the same.
  • A Brief Report on the activities undertaken by the FSDC Sub-Committee chaired by Governor, RBI was placed before the FSDC. The Council also undertook a comprehensive review of the action taken by members on the decisions taken in earlier meetings of the Council.
  • The Regulators offered their suggestions/proposals for the upcoming Budget 2017-18, which were deliberated upon by the Council.
  • The Council also reviewed the present status of NPAs in Banks and the measures taken by Government & RBI for dealing with the stressed assets and discussed on further action in this regard

 

  1. Equity markets well regulated: Sebi

Source: Indian Express

Ahead of the budget, regulator Sebi equity markets are well regulated and it has made certain suggestions for deepening of capital markets.

Sebi Chairman, who was among the financial sector regulators present at the FSDC meeting, offered suggestions for the forthcoming budget for 2017-18.

Issues:

 

  • PFRDA Chairman said that made a case for making taxation of National Pension Scheme EEE (Exempt, Exempt, Exempt), as against the present EET (Exempt, Exempt, Tax), to bring them at par with EPFO and PPF where the maturity amount is not taxed.

 

  • The retirement saving scheme NPS, run by PFRDA, falls under EET category, wherein investment gets deduction in the taxable income and also income/interest/gains are not taxed. However, maturity proceeds are taxable.
  • In the last Budget, Finance Minister Arun Jaitley had made withdrawals from NPS on maturity tax free up to 40 per cent of the total corpus, while the balance corpus of 60 per cent continue to be taxable.
  • Under the ‘Triple E’ category investment, all three accrued interest and withdrawal are exempted from tax.
  • This, according to PFRDA, would help in increasing the customer base. Our emphasis was more on increasing pension coverage. The EEE benefit for NPS was the major demand.

The Pension Fund Regulatory and Development Authority (PFRDA) is keen to regulate the pension funds floated by insurance companies and mutual funds which are currently under other regulatory bodies.

While pension schemes of insurers are under the Insurance Regulatory and Development Authority, schemes floated by mutual funds are regulated by the Securities and Exchange Board of India.

  1. UN declares 2017 as the International Year of Sustainable Tourism for Development World Tourism Organization UNWTO
  • The United Nations General Assembly (UNGA) has declared the year 2017 as the International Year of Sustainable Tourism for Development.
  • The declaration recalls the potential of tourism sector to advance the universal 2030 Agenda for Sustainable Development and 17 Sustainable Development Goals (SDGs).

Key facts:

The International Year aims to support a change in business practices, policies and consumer behaviour towards a more sustainable tourism sector that can contribute effectively to achieve targets of the SDGs.

It will promote tourism sector’s role in five key areas:

  • Inclusive and sustainable economic growth
  • Social inclusiveness, employment and poverty reduction
  • Cultural values, diversity and heritage
  • Resource efficiency, environmental protection and climate change
  • Mutual understanding, peace and security.

Tourism is under three targets of the SDGs:

  • They are Goal 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
  • Goal 12: Sustainable Consumption and Production and
  • Goal 14: Conserve and sustainably use the oceans, seas and marine resources for sustainable development.

The tourism sector accounts for 7% of worldwide exports, 10% of the world’s GDP and one in eleven jobs. If managed well, it can foster inclusive economic growth, social inclusiveness and protection of natural and cultural assets.

  1. Bitcoin nears record high as it becomes ‘safe haven’ asset

Source: The Hindu

Bitcoin neared record highs with the surging digital currency tipped to become a new safe haven asset as the world grapples with growing economic uncertainty.

  • The unit broke the $1,100 barrier on the Bitcoin Price Index, an average of major exchanges, to continue a dizzying rise that made it the best performing currency of 2016.
  • Bitcoin now has a total market capitalisation of about $18 billion — far more than other so-called “crypto-currencies” although a fraction of the value of other globally traded commodities.

What is a Bitcoin?

  • Bitcoin is a virtual currency that is created from computer code. Unlike a real-world currency such as the U.S. dollar or the euro, it has no central bank and is not backed by any government.
  • Instead, its community of users control and regulate it. Advocates say this makes it an efficient alternative to traditional currencies because it is not subject to the whims of a state that may wish to devalue its money to inflate away debt.
  • Just like other currencies, bitcoins can be exchanged for goods and services — or for other currencies — provided the other party is willing to accept them.

Where does it come from?

Bitcoin was launched in 2009 as a bit of encrypted software written by someone using the Japanese-sounding name Satoshi Nakamoto.

In 2016, secretive Australian entrepreneur Craig Wright said he was the creator, but some have raised doubts over his claim.

  • Transactions happen when heavily encrypted codes are passed across a computer network. The network as a whole monitors and verifies the transaction in a process that is intended to ensure no single bitcoin can be spent in more than one place simultaneously.
  • Users can “mine” bitcoins — bring new ones into being — by having their computers run complicated and increasingly difficult processes.
  • However, the model is limited and only 21 million units will ever be created.

What’s it worth?

Like any other currency, it fluctuates. But unlike most real-world analogues, bitcoin’s value has swung wildly in a short period.

Why has its value risen in recent months?

Analysts have suggested a number of reasons, including investors buying bitcoins as a hedge against currencies that are weakening against the U.S. dollar.

  • Other reasons include the currency turning into a virtual safe haven at a time of global economic uncertainty sparked by factors such as Mr. Trump’s U.S. election victory, as well as country-specific issues such as the chaotic withdrawal of high-value notes in India, and Chinese controls on the purchase of foreign currency.
  • The currency may also have been strengthened by the rise of digital payments and the dwindling supply of new bitcoins.

What’s the future?

  • Some commentators say that like many technological developments, the first iteration of a product will encounter difficulties, possibly terminal ones. But the trail it blazes might smooth the way for the next crypto-currency. However, Problems include an apparent vulnerability to theft when bitcoins are stored in digital wallets.
  • The virtual currency movement also faces legitimacy issues because of the way it allows for anonymous transactions — the very thing that libertarian adopters like.
  • Detractors say bitcoin’s use on the underground Silk Road website, where users could buy drugs and guns with it, is proof that it is a bad thing.
  • If bitcoin does become more widely accepted, experts, it could lead to more government regulations, which would negate the very attraction of the bitcoin concept.

  1. Centre working on scheme to support States in creating export infrastructure

Source: The Hindu

The government is working on a scheme to incentivise creation of export infrastructure by States.

  • It will be on the lines of the Assistance to States for Infrastructure Development of Exports (ASIDE) scheme that was discontinued by the Centre in 2015-16, but with different features.
  • States will also be ranked by the Centre on their logistics performance beginning this year. This could give potential investors an idea of what to expect in terms of logistical support when they take their investment decisions.

The proposed scheme would be called Trade Infrastructure for Export Scheme or TIES and would help strengthen the Centre’s ties with States.

The ASIDE scheme was given up by the Centre when the States’ share in net proceeds of the Union tax revenues was increased to 42 per cent from 32 per cent in line with the 14th Finance Commission’s recommendations.

Issues:

  • To reduce the impact of global economic slowdown on Indian exports, the Commerce Minister exhorted the States to diversify India’s exports basket by enabling more sectors and breaching new markets.
  • The Indian trade portal, a 100-150 SPS notifications and a similar number of TBT notifications are being issued by WTO member countries each month.
  • Around 50% to 60% of these measures have the potential to impact our trade.
  • Three sector specific needs can broadly be categorised into interventions required for agri & marine products, for forest produce and for industrial products.

Assistance to States for Developing Export Infrastructure and other Allied Activities (ASIDE)

    • The Scheme is in vogue since Year 2002.
    • Allocation is based on the export performance of each State and also its growth rate.
    • The objective of the scheme is to involve the states in the export effort by providing financial assistance for the creation of critical infrastructure for the development and growth of exports.

 

  • State Level Export Promotion Committee (SLEPC) for ASIDE under the Chairmanship of Chief Secretary approves the project proposals.

 

 



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