UPSC Daily Current Affairs- 13th November 2022 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly PDF Download

GS-I

Context

Prime Minister of India paid tributes to India's first education minister Maulana Abul Kalam Azad on his 134^th birth anniversary.

• 11^th November is observed as National Education Day every year since 2008 to commemorate his birth anniversary.

Who was Maulana Abdul Kalam Azad?

• Birth: Maulana Abul Kalam Azad, originally named Muhiyuddin Ahmad, was born in 1888 in Mecca, Saudi-Arabia.
  • Azad was a brilliant debater, as indicated by his name - “Abul Kalam” which literally means “Lord of Dialogues”.
• Brief Profile:
  • He donned many hats of being a journalist, freedom fighter, politician, and educationist.
• Contributions (Pre-Independence):
  • He was a proponent of Hindu Muslim unity, opposed to Partition.
  • In 1912, he started a weekly journal in Urdu called Al-Hilal which played an important role in forging Hindu-Muslim unity after the bad blood created between the two communities in the aftermath of Morley-Minto reforms (1909).
  • Under the 1909 reforms, the provision of separate electorates for Muslims was resented by Hindu.
  • The government regarded Al- Hilal as a propagator of secessionist views and banned it in 1914.
  • Maulana Abul Kalam Azad then started another weekly called Al-Balagh with the same mission of propagating Indian nationalism and revolutionary ideas based on Hindu-Muslim unity.
  • In 1916, the government banned this paper too and expelled Maulana Abul Kalam Azad from Calcutta and exiled him to Bihar from where he was released after the First World War 1920.
  • Azad supported the Non-Cooperation Movement (1920-22) started by Gandhiji and entered the Indian National Congress in 1920.
  • In 1923, he was elected as the president of Indian National Congress. At an age of 35, he became the youngest person to serve as the President of the Indian National Congress.
  • Maulana Azad was arrested in 1930 for violation of the salt laws as part of Gandhiji’s Salt Satyagraha. He was put in Meerut jail for a year and a half.
  • He again became the president of Congress in 1940 and remained in the post till 1946.
• An Educationist:
  • In the field of education, Maulana Azad had been an uncompromising exponent of universalism, a truly liberal and humanitarian educational system.
  • Azad’s ideal was a fusion of the Eastern and Western concepts of man, to create a fully integrated personality. Whereas the Eastern concept dwelt on spiritual excellence and individual salvation, the Western concept laid stress on worldly achievements and social progress.
  • He was one of the founding members of the Jamia Millia Islamia University, originally established at Aligarh in the United Provinces in 1920.
  • His Works: Basic Concept of Quran, Ghubar-eKhatir, Dars-e-Wafa, India Wins Freedom, etc.
• Contributions (Post-Independence):
  • In 1947, he became the first education minister of free India and remained at this post till his death in 1958. In his tenure, he did tremendous work for the upliftment of the country.
  • The first IIT, IISc, School of Planning and Architecture and the University Grants Commission were established under his tenure as the education minister.
• Indian Council for Cultural Relations, for introduction of Indian culture to other nations.
• Following three academics were formed:
  • Sahitya Academy for development of literature;
  • Sangeet Natak Academy for the development of Indian music and dance;
  • Lalit Kala Academy for the development of painting.
  • Maulana Abul Kalam Azad was posthumously awarded India's highest civilian honour, Bharat Ratna in 1992.

Source: Hindustan Times

Context

• During the COP27 climate summit in Sharm El Sheikh, Egypt, the UAE and Indonesia announced the "Mangrove Alliance for Climate."

What is the Mangrove Alliance for Climate (MAC)?

• It includes UAE, Indonesia, India, Sri Lanka, Australia, Japan, and Spain.
• It seeks to educate and spread awareness worldwide on the role of mangroves in curbing global warming and its potential as a solution for climate change.
• However, the intergovernmental alliance works on a voluntary basis which means that there are no real checks and balances to hold members accountable.
• Instead, the parties will decide their own commitments and deadlines regarding planting and restoring mangroves.
• The members will also share expertise and support each other in researching, managing and protecting coastal areas.

What are Mangroves?

• About:
  • Mangroves are defined as assemblages of salt tolerant trees and shrubs that grow in the intertidal regions of the tropical and subtropical coastlines.
  • They grow luxuriantly in the places where freshwater mixes with seawater and where sediment is composed of accumulated deposits of mud.
• Features:
  • Saline Environment: They can survive under extreme hostile environments such as high salt and low oxygen conditions.
  • Low oxygen: Underground tissue of any plant needs oxygen for respiration. But in a mangrove environment, the oxygen in soil is limited or nil.
    • For the purpose of breathing, they develop special roots called pneumatophores.
  • Survival in Extreme Conditions: With their roots submerged in water, mangrove trees thrive in hot, muddy, salty conditions that would quickly kill most plants.
  • Viviparous: Their seeds germinate while still attached to the parent tree. Once germinated, the seedling grows into a propagule.
    • A propagule is a vegetative structure that can become detached from a plant and give rise to a new plant. Examples include a bud, sucker, or spore.
• Significance:
  • Mangroves trap and cycle various organic materials, chemical elements, and important nutrients in the coastal ecosystem.
  • They provide one of the basic food chain resources for marine organisms.
  • They provide physical habitat and nursery grounds for a wide variety of marine organisms, many of which have important recreational or commercial value.
  • Mangroves also serve as storm buffers by reducing wind and wave action in shallow shoreline areas.
• Area Covered:
  • Global Mangrove Cover:
    • The total mangrove cover in the world is one 1,50,000 sq kms.
    • Asia has the largest number of mangroves worldwide.
    • South Asia comprises 6.8% of the world's mangrove cover.
  • Indian Mangrove Cover:
    • India's contribution is 45.8% total mangrove cover in South Asia.
    • According to the Indian State Forest Report 2021, Mangrove cover in India is 4992 sq. Km which is 0.15% of the country's total geographical area.
  • Largest Mangrove Forest: Sundarbans in West Bengal are the largest mangrove forest regions in the world. It is listed as a UNESCO World Heritage Site.
  • It is followed by Gujarat and Andaman, and Nicobar Islands.

What are the Challenges with Mangrove Conservation?

• Commercialisation of Coastal Areas:
  • Aquaculture, coastal development, rice and palm oil farming and industrial activities are rapidly replacing these salt-tolerant trees and the ecosystems they support.
• Shrimp Farms:
  • The emergence of shrimp farms have caused at least 35% of the overall loss of mangrove forests.
  • The rise of shrimp farming is a response to the increasing appetite for shrimp in the United States, Europe, Japan and China in recent decades.
• Temperature Related Issues:
  • A fluctuation of ten degrees in a short period of time is enough stress to damage the plant and freezing temperatures for even a few hours can kill some mangrove species.
• Soil Related Issues:
  • The soil where mangroves are rooted poses a challenge for plants as it is severely lacking in oxygen.
• Excessive Human Intervention:
  • During past changes in sea level, mangroves were able to move further inland, but in many places human development is now a barrier that limits how far a mangrove forest can migrate.
  • Mangroves also frequently suffer from oil spills.

What are the Related Initiatives?

• UNESCO Designated Sites: The inclusion of mangroves in Biosphere Reserves, World Heritage sites and UNESCO Global Geoparks contributes to improving the knowledge, management and conservation of mangrove ecosystems throughout the world.
• International Society for Mangrove Ecosystem (ISME): The ISME is a non-governmental organization established in 1990 to promote the study of mangroves with the purpose of enhancing their conservation, rational management and sustainable utilization.
• Blue Carbon Initiative: It is focused on mitigating climate change through the conservation and restoration of coastal and marine ecosystems.
• It is coordinated by Conservation International (CI), IUCN, and the Intergovernmental Oceanographic Commission-UNESCO (IOC-UNESCO).
• International Day for the Conservation of the Mangrove Ecosystem: UNESCO celebrates this day on 26^th July with the aim of raising awareness about mangrove ecosystems and to promote their sustainable management and conservation.

Way Forward

• Conservation of mangroves needs to be linked with a broader perspective with active community involvement, environmental security, and reducing any risks from natural calamities.
• Such measures need to be adopted more holistically in view of anticipatory adaptation measures which hold the clue for successful and effective management. 
• The integration of mangroves into the national programmes for reducing emissions from deforestation and forest degradation is the need of the hour.
• Creating a new carbon sink from mangrove afforestation and reducing emissions from mangrove deforestation are two possible ways for countries to meet their NDC targets and achieve carbon neutrality.

Source: Indian Express

GS-II

Context

Recently, Union Minister addressed the Indian Tea Association’s (ITA’s) International Small Tea Grower's Convention.

• Founded in 1881, the ITA is the premier and the oldest organization of tea producers in India. It has played a multi-dimensional role towards formulating policies and initiating action towards the development and growth of the industry.

What is the State of Indian Tea Industry?

• Production:
  • India is the second-largest producer of tea globally.
  • The northern part of India is the biggest producer at about 83% of the country's annual tea production in 2021-22 with the majority of the production coming from Assam followed by West Bengal.
  • The Assam valley and Cachar are the two tea producing regions in Assam.
  • In West Bengal, Dooars, Terai and Darjeeling are the three major tea producer regions.
  • The southern part of India produces about 17% of the country's total production with the major producing states being Tamil Nadu, Kerala, and Karnataka.
  • India's total tea production for the financial year 2020-21 it was 1,283 million kg.
• Consumption:
  • India is also among the world's top tea consuming countries, with 80% of the tea produced in the country consumed by the domestic population.
• Export:
  • India is among the top 5 tea exporters in the world making about 10% of the total exports.
  • In the year 2021, the total value of tea exports from India was around USD 687.9 million.
  • India exports tea to more than 25 countries throughout the world.
  • Russia, Iran, UAE, USA, the UK, Germany, and China are some of the major importers of tea from India.
  • India's total tea exports during 2021-22 in quantity was 201 million kg.
  • The majority of the tea exported out of India is black tea which makes up about 96% of the total exports.
  • The types of tea exported through India are: Black tea, Regular tea, Green tea, Herbal tea, Masala tea and Lemon tea.
  • Out of these, black tea, regular tea and green tea make up approximately 80%, 16% and 3.5% of the total tea exported from India.
  • Indian Assam, Darjeeling, and Nilgiri tea are considered one of the finest in the world.
  • Indian tea is one of the finest in the world due to strong geographical indications, heavy investment in tea processing units, continuous innovation, augmented product mix, and strategic market expansion.
• Geographical Indication (GI) Tag:
  • Darjeeling Tea also known as "Champagne of teas," worldwide because of its flowery scent was the 1^st GI tag product.
• Other two variants of Darjeeling tea i.e., Green and White tea also hold GI tags.
  • Regulation of the Industry:
  • Tea Board of India is in charge of developing and promoting the tea industry in India.

What is Tea Board of India?

• About:
  • It is a statutory body under the Ministry of Commerce that was set up in 1953 for the development of tea industry in India. It started functioning in 1954.
• Vision:
  • Its vision and mission is to make the country a leading producer of tea across the globe for which it established several programmes and schemes.
• Members:
  • The Board is constituted of 31 members (including Chairman) drawn from Members of Parliament, tea producers, tea traders, tea brokers, consumers, and representatives of Governments from the principal tea producing states, and trade unions
  • The Board is reconstituted every three years.
• Offices in India:
  • The board has its headquarters located in Kolkata and 17 other offices across India.
• Foreign Offices:
  • Currently Tea Board has two overseas offices located at Dubai, and Moscow.

What are the Initiatives by Tea Board of India?

• Promotion for packaged Tea of Indian origin:
  • The scheme provides assistance in promotional campaigns - up to 25% of the cost reimbursement, display in International Departmental Stores, product literature and website development, and inspection charges reimbursement of up to 25% of the charges.
• Subsidies for Domestic Exporters:
  • The Tea Board also provides subsidies to the domestic exporters to participate in International Fairs and Exhibitions.
• Tea Development and Promotion Scheme:
  • This scheme was launched in November 2021 by the Tea Board of India for the period of 2021-26.
  • The objective of this scheme is to enhance the productivity and quality of the production in India.
  • There are seven important components to this scheme:
• Plantation development of small tea farmers
  • Creation of sector specific actions plan for North East India
  • Supporting the tea producers and trader in market promotion activities
  • Worker's welfare
  • Research and development activities
  • Regulatory reforms
  • Establishment expenses
  • Online Licensing System (auto-renewal of 3 types of licenses i.e., exporter license, tea waste license and tea warehouse license).
• Chai Sahyog Mobile App:
  • It addresses various issues of small tea growers.

How to Encourage the Growth of Indian Tea Industry?

• One District and One Product (ODOP) scheme can help spreading the glory of Indian Tea.
• In order to make the tea sector profitable, viable and sustainable, the ‘AROMA’ of tea must be enhanced:
• Assistance: Support small growers to improve quality with sustainability, increase production to meet domestic and international demand.
• Re-energise: Create infrastructure to augment exports and focus on high value markets such as EU, Canada, South America & Middle East.
• Organic: Promote organic and GI tea through brand promotion and marketing.
• Modernisation: To enable tea farmers to become self-reliant and strengthen local supply chains.
• Adaptability: Focus on the importance of a risk proof ecosystem, that is, the need for sustainable solutions to make tea plantations meet the challenges of climate change.

Source: PIB

Context

As per the BIOTECH-PRIDE guidelines of the Government of India, IBDC is mandated to archive all life science data generated from publicly-funded research in India.

Features:

• IBDC has accumulated over 200 billion bases from 2, 08, 055 submissions from more than 50 research labs across India
• IBDC dashboard provides customized data submission, access, data analysis services, and real-time SARS-CoV-2 variant monitoring across India
• IBDC is mandated to archive all life science data generated from publicly-funded research in India
• It has a data storage capacity of about 4 petabytes and houses the ‘Brahm’ High Performance Computing (HPC) facility.
• IBDC has started nucleotide data submission services via two data portals viz. the ‘Indian Nucleotide Data Archive (INDA)’ and ‘Indian Nucleotide Data Archive – Controlled Access (INDA-CA)’ and has accumulated over 200 billion bases from 2,08,055 submissions from more than 50 research labs across India.

Source: PIB

Recently, the government has amended Aadhaar regulations. The Aadhaar (Enrolment and Update) Regulations have been updated to reflect the changes.

About Aadhar:

• A 12-digit unique identity for every Indian individual, including children and infants
• Enables identification for every resident Indian.
• Establishes uniqueness of every individual on the basis of demographic and biometric information.
• It is a voluntary service that every resident can avail irrespective of present documentation.
• Each individual will be given a single unique Aadhaar ID number.
• Aadhaar will provide a universal identity infrastructure which can be used by any identity-based application (like ration card, passport, etc.)
• 134 crore Aadhaar numbers have been issued till date.
• Around 1000 government schemes – 650 from state governments and 315 from central government use Aadhaar authentication services to avoid deduplication and removal of ghost beneficiaries.
• Aadhaar enrolment of adult citizens is nearing 100 per cent.

About the new rules:

• Updating the documents
  • As per the regulations earlier, residents who were older than 15 years at the time of enrolment were recommended to update their biometric data every 10 years.
  • The process of updating documents is not mandatory.
• Ensuring accuracy
  • This process will help in ensuring the accuracy of information in the Central Identities Data Repository (CIDR).
• Demographic information
  • The amendment of the Aadhaar regulation is limited to updating demographic information and does not involve biometric data such as fingerprints.

Issues with Aadhar:

• Aadhaar act allows cancellation of Aadhaar number for any reason by the government and citizens have no recourse.
• A Centralized database is a concern because once it is compromised everyone is at risk.
• There is no ID or address verification and there is no means of identifying fakes.
• There is no data protection law in place in India.
• Enrolment software hacks allowed foreign nationals to create Aadhaar numbers thus creating a national security risk.
• UIDAI does not have a monitoring mechanism but only an audit mechanism.
• Data goes to third parties vulnerability increases due to that.

Usage of Aadhaar

For Governments, Service Agencies

• UIDAI issues Aadhaar numbers to the residents only after de-duplicating their demographic and biometric attributes against its entire database.
• Aadhaar seeding enables elimination of duplicates under various schemes which leads to substantial savings to the government exchequers.
• It also provides the government with accurate data on the beneficiaries and enables implementation of direct benefit transfer (DBT) programmes. Aadhaar authentication enables the implementing agencies to verify the beneficiaries at the time of service/benefits delivery and also ensures the targeted delivery of benefits to them. All these activities will lead to:-
  • Curbing Leakages through Targeted Delivery: All social welfare programmes where beneficiaries are required to be confirmed before the service delivery, stand to benefit from UIDAI’s authentication services.
• This will result in curbing leakages and ensuring that services are delivered to the intended beneficiaries only.
  • Examples include subsidized food and kerosene delivery to Public Distribution System (PDS) beneficiaries, worksite attendance of Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) beneficiaries, etc.
• Improving Efficiency and Efficacy: With the Aadhaar platform providing accurate and transparent information about the service delivery mechanism, government can improve disbursement systems and utilize its scarce development funds more effectively and efficiently.

For Residents

• Aadhaar system provides single source offline/online identity verification across the country for the residents.
• Once residents enroll, they can use their Aadhaar number to authenticate and establish their identity multiple times using electronic means or through offline verification, as the case may be.
• It eliminates the hassle of repeatedly providing supporting identity documents each time a resident wishes to access services, benefits or subsidies.
• Since Aadhaar is universal identity accepted across the whole country, the Aadhaar system enables mobility to millions of people who migrate from one part of the country to another by providing a portable proof of identity that can be verified through Aadhaar authentication on-line anytime, anywhere.

Additional Information:

About Unique Identification Authority of India (UIDAI) & Aadhar

Aadhaar Act & Establishment of UIDAI:

• The UIDAI is a statutory authority established under the provisions of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (“Aadhaar Act 2016”) by the Government of India, under the Ministry of Electronics and Information Technology (MeitY).

Need of UIDAI:

• UIDAI was created to issue Unique Identification numbers (UID), named as “Aadhaar”, to all residents of India. The UID had to be –
• Robust enough to eliminate duplicate and fake identities, and
• Verifiable and authenticable in an easy, cost-effective way.
• Under the Aadhaar Act 2016, UIDAI is responsible for:
  • Aadhaar enrolment and authentication, including operation and management of all stages of Aadhaar life cycle,
  • Developing the policy, procedure, and system for issuing Aadhaar numbers to individuals and
  • Perform authentication and the security of identity information and authentication records of individuals.

Source: The Hindu

The European Commission has adopted a proposal for a Directive on corporate sustainability due diligence.

• The European Union relaunched negotiations with India for a Free Trade Agreement, and launched separate negotiations for an Investment Protection Agreement and an Agreement on Geographical Indications (GIs).

About European Union:

• The European Union (EU) is a supranational political and economic union of 27 member states that are located primarily in Europe.
  • Branches of power
  • Executive Branch
  • European Council
  • It sets the broad political direction to the EU.
• It convenes at least four times a year and comprises the president of the European Council, the president of the European Commission and one representative per member state.
• European Commission:
  • It acts both as the EU’s executive arm, responsible for the day-to-day running of the EU, and also the legislative initiator, with the sole power to propose laws for debate.
• Legislative Branch:
  • European Parliament
  • Council of the European Union
  • European Commission
• Judicial Branch
  • The Court of Justice is the judicial branch of the European Union and consists of two courts:
  • Court of Justice and
  • General Court.

Importance of EU:

• The EU is India’s third largest trading partner, accounting for €88 billion worth of trade in goods in 2021 or 10.8% of total Indian trade.
• India is the EU’s 10th largest trading partner, accounting for 2.1% of EU total trade in goods.
• The EU predominantly purchases textiles (17.8%), chemicals (15%), machinery and electrical equipment (13%) and agricultural products (7.9%).
• About 6,000 European companies are present in India, which provide over 1.7 million direct jobs and 5 million indirect jobs across sectors.

About Directive on Corporate Sustainability Due Diligence (CSDC):

• The European Commission published a proposal for a Directive on Corporate Sustainability Due Diligence.
• It aims to foster sustainable and responsible corporate behavior throughout global value chains.

Applicability:

• EU limited liability companies:
• Group 1: with 500+ employees on average and a net worldwide turnover in excess of EUR 150 million in the last financial year.
• Group 2: not in Group 1 but operating in high-risk sectors, with more than 250 employees and a net worldwide turnover in excess of EUR 40 million in the last financial year.

Non-EU limited liability companies active in the EU:

• Group 1: with a net turnover in excess of EUR 150 million in the EU in the financial year preceding the last financial year;
• Group 2: not in Group 1 but with a net turnover in excess of EUR 40 million, but not exceeding EUR 150 million in the EU in the financial year preceding the last financial year.

Key Features

• It will require certain large EU and non-EU companies to set up mandatory due diligence practices to identify, prevent or mitigate, and ultimately terminate adverse impacts of their corporate activities on human rights and the environment.
• The EU Corporate Sustainability Due Diligence (CSDD) proposal is an important component of the European Green Deal towards a sustainable future.

Impacts of EU’s Sustainability:

• EU companies that are covered under the current form of the proposed directive are going above and beyond to protect themselves.
• They are putting in place robust mechanisms to mitigate any possible risks.
• This implies clear contractual clauses, establishment of complaint procedures, increased third-party assessments, and capacity building etc.

Issues associated with India:

• Child labour and trafficking in India.
  • As per the 2011 census, there were over 11 million child laborers in India.
  • Covid and its impact on economic security and education led to an increase in these numbers.
• A large number of these children fall somewhere within the blind spots of corporate supply chains.
• Gaps in prosecution for violations and rehabilitation of victims.

Way Forward:

• This is the right time for the government and corporations to evaluate our sustainability systems and improve on them transparently and objectively.
• Companies must establish clear and transparent contractual clauses with all tiers of suppliers, contractors and sub-contractors for risk assessment and mitigation, disclosure and remediation for human-rights violations.
• Internal audit and training exercises should filter to the lower tiers of the supply chain, where maximum risk lies.
• Companies can introduce greater technology and automation to help reduce tiers, informality and fragmentation in supply chains.
• Partnerships with third party experts and the government can help integrate existing best practices in their operations.

Source: Live Mint

GS-III

Policymakers trying to transition India to a less-cash economy have been confounded by a peculiar phenomenon of currency in circulation growing right alongside rising digital adoption.

About Unified Payments Interface (UPI):

• It is a system that facilitates instant fund transfer between two bank accounts on a mobile platform, without requiring details of the beneficiary’s bank account.
• It is an advanced version of Immediate Payment Service (IMPS) round–the-clock funds transfer service to make cashless payments faster, easier and smoother.
• It is developed by National Payment Corporation of India (NPCI) and regulated by RBI.
• NPCI launched UPI with 21 member banks in 2016.
• India is expanding UPI based infrastructure in many foreign countries such as Singapore’s PayNow has been linked with UPI.

Importance of UPI:

• With the mushrooming of mobile wallets, QR-based apps and the Unified Payments Interface (UPI), the volume of digital transactions leapfrogged from 293 crore in March 2020 to 799 crore by March 2022, as per RBI data.
• But CIC (currency in circulation) as a proportion of GDP has been rising too.
• After hovering at 11-12 per cent until FY20, it hit 14 per cent in FY21 and remained at 13 per cent in FY22.
• CIC in developed economies tends to be in the single digits.
• But a recent study by SBI Ecowrap offers hope that digital payments may finally be reducing the need for hard cash, in some respects.
• For the first time, the Diwali week this year saw a dip in CIC as opposed to sharp spikes witnessed in the last 20 years.
• The lower need for cash can mainly be traced to the widespread adoption of UPI.

Evolution of UPI:

• UPI has gone a long way in enabling the digitalization of India’s payments economy.
• It has added layers of convenience in the way people transact with money.
• UPI being an indigenous ‘Made in India’ product has helped India find its unique place in the globe in the digital payments arena.
• Likely to be a $180 billion market by 2026, India is among top nations in this space.
• With UPI expanding beyond the borders, it has certainly brought a lot of pride to the nation.

Significance of UPI enabled payments:

• Low-Cost Source of Funds : UPI’s use prompts bank account holders to hold larger balances in their savings accounts, providing banks with a low-cost source of funds.
  • UPI manages to materially reduce the need for the public to deal in cash.
• Greater traceability of transactions: Substitution of anonymous cash payments with digital ones also allows for greater traceability of transactions for the taxman looking to widen the tax base.
• Reduce Logistic Costs: If the demand for paper currency diminishes, banks would save on the logistics costs involved in safely storing and transporting paper currency and regularly refilling their ATMs.
• Increasing tax revenue: With digitalization, the market’s black money can be diminished, increasing compliance and increasing tax revenue.

Key Issues associated with UPI payment systems:

• High transaction failure rates: Digital payments are currently characterised by high transaction failure rates.
• A Large Number of people left Behind: With options such as mobile wallets, payment apps and QR code readers available only on smartphones, feature phone users who make up roughly half of India’s mobile subscriber base have been left behind.
• Many people lack digital literacy: Since most people lack digital literacy, they are unable to use the UPI system.

Way Forward:

• There has to be widespread awareness campaign to educate users about the safe use of UPI and the convenience it brings.
• Digital payment services like UPI were currently used by just a fifth of the population.
• Unless a third adopted it, cash in circulation would not see a durable reduction.
• Despite affluent consumers embracing them in a big way, digital payments are still far from ubiquitous. Policymakers may need to address all the issues to further the reach of digital payments.
• Additional Information:
  • Currency in circulation refers to the amount of cash–in the form of paper notes or coins–within a country that is physically used to conduct transactions between consumers and businesses.
  • Currency in circulation is all of the money that has been issued by a country’s monetary authority, minus cash that has been removed from the system.
  • It represents part of the overall money supply, with a portion of the overall supply being stored in checking and savings accounts.

Source: The Hindu