Current Affair

Back
[DAILY CURRENT AFFAIRS, 30 MAY 2023]

CHILIKA LAKE

 
 
1. Context
As many as 62,947 birds of 88 species were found in the vast lake during the annual summer survey of birds conducted by the Chilika wildlife division of Odisha government’s forest, environment and climate change department on May 24, 2023
More birds flocked to the Chilika Lake in Odisha this summer than the previous years, despite the day temperature in and around Asia’s largest brackish water lagoon hovering 39 to 41 degrees Celsius
 
2. Key Takeaways
  • In the summer of 2022 and 2021, as many as 61,350 birds of 95 species and 48,728 birds of 106 species had spotted in the blue lagoon, while in the summer of 2020, 45,056 birds of 97 species were counted
  • Birds found this summer include 54,407 waterfowls of 43 species and 8,540 resident birds of 45 species
  • The species like grey-headed swamphen or purple swamphen were spotted the most number (8,386) followed by Asian Openbilled-stork (7,454), whiskered tern (5,033), little cormorant (4,263) and little egret (3,929)
  • Habitat improvement, availability of food and eviction of the prawn gherries (enclosures) in the lake are some of the reasons for more birds flocking this summer and in the last winter than the previous years
  • Chilika is a favourable destination for the winged guests during the winter seasons and is the ideal habitat for the waterfowls and resident birds for the entire year
chilika: Chilika lake a hotspot of biodiversity - The Economic Times
 
3. Regions from where birds migrate
  • The birds, mostly from beyond the Himalayas in northern Eurasia, the Caspian region, Siberia, Kazakhstan, Baikal lake and the remote areas of Russia and neighbouring countries, visit the Chilika every winter and start their homeward journey before the onset of summer
  • Some of the migratory birds preferred to remain in the lake instead of going to their native places despite the heat
  • The flamingos and pelicans generally come to Chilika in delay. While pelicans start their journey with the onset of monsoon, some flamingos choose to stay in the lake over the years
4. Convention on Migratory Soecies of Wild Animals
  • As an environmental treaty of the United Nations, CMS provides a global platform for the conservation and sustainable use of migratory animals and their habitats
  • CMS brings together the States through which migratory animals pass, the Range States, and lays the legal foundation for internationally coordinated conservation measures throughout a migratory range
  • As the only global convention specializing in the conservation of migratory species, their habitats and migration routes, CMS complements and co-operates with a number of other international organizations, NGOs and partners in the media as well as in the corporate sector
  • Migratory species threatened with extinction are listed on Appendix I of the Convention
  • CMS Parties strive towards strictly protecting these animals, conserving or restoring the places where they live, mitigating obstacles to migration and controlling other factors that might endanger them.
  • Besides establishing obligations for each State joining the Convention, CMS promotes concerted action among the Range States of many of these species
  • Migratory species that need or would significantly benefit from international co-operation are listed in Appendix II of the Convention
5. About Chilika lake
  • Chilika Lake is a brackish water lagoon, spread over the Puri, Khordha and Ganjam districts of Odisha state on the east coast of India, at the mouth of the Daya River, flowing into the Bay of Bengal, covering an area of over 1,100 square kilometres. It is the biggest lake in India after Vembanad Lake
  • Chilika supports some of the largest congregation of migratory birds in the country, particularly during the winter
  • Chilika is an integral part of the culture of coastal Odisha
  • Almost 400 years ago, the saint poet Purshottam Das, a devotee of Lord Jagannath, wrote a poem about Lord Krishna dancing with a milkmaid called Maniki, who had come to sell curds on the banks of the Chilika
 
 
 
 
 
Previous Year Questions:
1. Chilika lake is (WBCS 2018)
A. Salt water lake
B. Fresh water lake
C. Fresh water lake in the monsoon
D. Salt water lake in Summer season
Answer (A)
 
Source: DownToEarth

TEMPERATURE RISE OF 2 DEGREES

 

1. Context

Under current climate change policies, billions will face life-threatening heat. But a global network of heat officers are tackling the problem in their cities. A study, led by scientists at the UK’s University of Exeter and Nanjing University in China, found that 60 million people are already exposed to dangerous heat levels, characterized by an average temperature of 29 degrees Celsius (84.2 degrees Fahrenheit) or higher. 

2. Key Takeaways

  • About 2 billion people will live in hazardous heat conditions by the end of the century if climate policies continue on their current trajectory, according to new research published in the Nature Sustainability journal. That represents 23 percent of the projected global population.
  • If the climate warms more drastically a potential scenario under current policies about 3.3 billion people could face extreme temperatures by the end of the century.

3. How do hot temperatures harm human health?

  • Extreme heat can result in a range of illnesses and death, according to the World Health Organisation (WHO). These include heatstroke and hyperthermia.
  • Temperature extremes also worsen chronic conditions and have an indirect effect on disease transmission, air quality, and critical infrastructure.
  • The elderly, infants and children, pregnant women, outdoor and manual workers, athletes, and the poor are particularly vulnerable to higher temperatures.
  • People living in India, Sudan, and Niger will all be heavily affected by even 1.5 degrees of warming, but 2.7 degrees will have enormous effects on countries like the Philippines, Pakistan, and Nigeria.

4. Calculating the human cost of Climate Change

  • Researchers said their study breaks the trend of modeling climate impacts in economic rather than human terms.
  • Most other models also prioritize current populations over future ones, with inequality in global warming being "both globally distributed, but also intergenerational."
  • It fundamentally values my life more than my children's lives and certainly more than my grandchildren's lives.
  • Looking at individual country impacts on dangerous heat levels, researchers found that current emissions from 1.2 average US citizens condemn a future human to live in extreme heat. 
  • Despite having disproportionate emissions, the US population faces a much lower threat from dangerous temperatures.

5. How can people be protected from extreme heat?

  • Previous studies have shown cities are particularly vulnerable to such dangerous temperature rises, due to the "heat island effect".
  • Buildings, roads, and infrastructure absorb and radiate the sun's heat more than natural environments like forests and water bodies, raising the urban temperature by as much as 15 degrees Celsius in some cases, compared to rural areas.
  • Cities around the world are introducing the new role of chief heat officer to deal with inevitable temperature increases.
  • One of those is Cristina Huidobro, who took up the post of Chile's capital Santiago in March 2022.
  • Many cities in the world face extreme heat, but the solutions and the way you approach it are very, very local, Huidobro told DW.
  • Preparedness can include categorizing heat waves in the same way as other natural disasters or setting up an alert threshold to trigger a certain city response.
  • Limiting warming to the lower Paris Accord target of 1.5 degrees Celsius above pre-industrial levels would still expose 400 million people to dangerous heat levels by the end of the century, the study found.
  • The third prong is adapting the city to the new reality of high temperatures, largely by creating more green spaces in the city.
  • Santiago has just launched an urban reforestation project to plant 30,000 trees across the city and develop strategies that treat the trees as part of the urban infrastructure. “Trees, trees, trees, trees everywhere. 
  • But planting trees isn’t as easy as people think. We’re putting trees in really dense streets, like in the main avenues of the city, where you have a lot of cement.
  • You need to dig a hole and do some civil work. It’s also not an instant solution to urban heat as trees need time to grow.

6. Emissions are seeking a peak in 2025

  • The G7 stressed the need for a global peak in emissions by 2025. The G7-the US, the UK, Germany, Italy, Japan, France, and Canada claimed that their emissions had already “peaked”, and asked all “major economies” to ensure that their individual emissions do not continue to rise beyond 2025.
  • Major economies are not defined, but in the context of climate change, it usually includes countries like India, China, Brazil, South Africa, and Russia, each of which is a significant emitter.
  • The 2025 peak year is not mandated under the Paris Agreement or any other international decision. India has long made it clear that it sees its emissions growing well into the next decade.
  • Even China, the world’s largest emitter, has indicated that it would peak only towards the end of this decade.
  • Still, a global peak of greenhouse gas emissions by 2025 is not implausible. The biggest emissions year so far has been 2019 about 55 billion tonnes of carbon dioxide equivalent.
  • After a dramatic drop in 2020 due to the Covid-19 pandemic, emissions rose again in 2021, the last year for which data are available, but remained lower than in 2019.
  • While emissions of developing countries, including India, are still increasing, most of the rich and industrialized nations are now seeing a decline, though not at the required pace.
  • Estimates from UN Climate Change suggest that if all countries took only those measures that they have promised so far, emissions in 2030 would be about 11 percent higher than 2010 levels.

7. Target of Net Zero by 2050

  • The G7 reiterated its commitment to turn net zero by 2050 and asked all ‘major economies’ to attain net-zero status by that year and to come up with detailed road maps to reach the target.
  • Science says that the world as a whole must become net zero by mid-century in order to meet the 1.5 degree Celsius target.
  • Interestingly, the 1.5 degree Celsius milestone is likely to be achieved a lot sooner not just as part of annual fluctuation but also on a more stable basis.
  • The Intergovernmental Panel on Climate Change (IPCC) has said this could happen before 2040 but that it was possible to pull back from there if aggressive action on climate continued. One of the prerequisites of the pullback is global net zero by 2050.
  • China has said it would turn net zero only in 2060, while India has set 2070 as the target. Some other countries, including big emitters like Russia and Saudi Arabia, have 2060 as their net-zero targets.
  • If these countries do not become net-zero by 2050, it would mean that the other major emitters, mainly the US and the European Union, would have to reach there much earlier. As of now, only Germany has said it would attain net-zero status by 2045.
  • However, the post-2050 targets of major developing countries are not set in stone. With fast-changing technologies and the rapid adoption of cleaner sources of energy, the situation could alter significantly over the next decade.
  • But countries like India would want to keep some wiggle room for themselves, and not make a commitment that they are not mandated to do.

8. End of Fossil Fuels

  • The G7 countries put no deadline on ending the use of fossil fuels, only saying that they were committed to accelerating the phase-out of “unabated fossil fuels” in line with 1.5-degree Celsius trajectories.
  • “Unabated” is not clearly defined; they also said they would eliminate “inefficient fossil fuel subsidies” by 2025 or earlier, without defining “inefficient subsidies”.
  • The G7 also claimed they had stopped financing new fossil fuel-based energy projects “except in limited circumstances”.
  • These circumstances include the need to end the dependence on Russian gas, because of which new investments in the gas sector would be considered legitimate. 
For Prelims: World Health Organisation (WHO), Climate Change, heat island effect, G-7, Greenhouse gas emissions, Intergovernmental Panel on Climate Change (IPCC).

Previous year Question

1. Consider the following statements: (UPSC 2022)
1. "The Climate Group" is an international non-profit organization that drives climate action by building large networks and runs them.
2. The International Energy Agency in partnership with the Climate Group launched a global initiative "EP100".
3. EP100 brings together leading companies committed to driving innovation in energy efficiency and increasing competitiveness while delivering on emission reduction goals.
4. Some Indian companies are members of EP100.
5. The International Energy Agency is the Secretariat to the "Under2 Coalition".
Which of the statements given above is correct?
A. 1, 2, 4 and 5
B. 1, 3, and 4 only
C. 2, 3, and 5 only
D. 1, 2, 3, 4 and 5
Answer: B
Source: The Indian Express

EVOLUTION OF GLOBAL PLASTIC TREATY

 
 
 
1. Context
The UNEP gathered in Paris, France May 29, 2023 for the second meeting of the Intergovernmental Negotiating Committee (INC) on Plastic Pollution, also known as INC-2. 
INC-2, a successor of INC-1, held in Punta del Este, Uruguay, last year, is the international community’s chance set the stage for negotiations on a global deal to end plastic pollution. 
2. Intergovernmental Negotiating Committee (INC)
  • United Nations Environment Assembly (UNEA) is the world’s highest-level decision-making body on environmental topics. Decisions and resolutions taken by the member states at the assembly also define the work of the United Nations Environment Programme (UNEP)
  • INC-2 is the international community’s chance to set the stage for negotiations on the substance of a global deal to end plastic pollution to edge closer to protecting ecosystems, species and humanity from the grave impacts of the linear plastics economy
  • UNEA was formed in 2012 to create an effective international environmental governance system. The INC is the body of member states of the UN that will be negotiating the treaty, since the treaty negotiation process is led by the member states.
  • Every two years, 193 of its member states, businesses and civil societies come together to set priorities for global environmental policies, develop international environmental law, and agree on policies to address the planet’s most pressing environmental challenges.
  • In 2017 at UNEA-3, countries agreed to open an ad-hoc open-ended expert group on marine litter and microplastics  to study the global landscape of efforts to address plastic pollution
3. Major Stakeholders
  • Apart from the member states, there are nine major groups and stakeholders: Non-profits, women, workers and trade unions, the scientific community, farmers, indigenous communities, children and youth, local authorities, businesses and industry
  • The major groups and stakeholders get to make joint interventions in the negotiations to put forward their concerns and suggestions
  • They get two minutes to make their interventions. These organisations are the ones that feature in the list of accredited organisations of the UNEP
  • Observer status is a privilege granted to non-members to allow them to participate in the organisation’s activities
  • Accredited organisations can also be observers in such meetings. Observers are not allowed to make interventions during the process of the negotiations
  • However, the observers are seen as agencies that can influence the priorities and decisions taken by certain member states
4. India-Plastic ban
  • The idea of a global plastic treaty was set in motion after India’s call for a global ban on single-use plastic at the UNEA 4 in 2019.
  • In UNEA 5.2- a historic resolution was adopted to “End Plastic Pollution”, keeping in mind the entire life cycle of plastic, from the extraction of raw materials to the disposal of plastic waste
  • The Ministry of Environment, Forest and Climate change, Government of India, notified the Plastic Waste Management Amendment Rules, 2021. The country is taking steps to curb littered and unmanaged plastic waste pollution.
  • Since July 1, 2022, India has banned the manufacture, import, stocking, distribution, sale, and use of single-use plastic (SUP) items with low utility and high littering potential.
  • India is a party to the United Nations Environment Assembly (UNEA).In all, 124 nations are party to the UNEA, and India has signed a resolution to draw up an agreement in the future that will make it legally binding for signatories to address the full life cycle of plastics, from production to disposal.

 

 

Previous Year Questions:

1.Consider the following statements : (UPSC 2023)

1.In India, the Biodiversity Management Committees are key to the realization of the objectives of the Nagoya Protocol.

2.The Biodiversity Management Committees have important functions in determining access and benefit sharing, including the power to levy collection fees on the access of biological resources within its jurisdiction.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

 

Source: DowntoEarth

SECOND-GENERATION NAVIC SATELLITE

1. Context 

Recently, The Indian Space Research Organisation (ISRO) launched the first of the second-generation satellites for its navigation constellation successfully.
The 2, 232 kg satellite, the heaviest in the constellation was launched by a Geosynchronous Satellite Launch Vehicle (GSLV) rocket that lifted off from Sriharikota.

2. Key points

  • Each of the seven satellites currently in the Indian Regional Navigation Satellite System (IRNSS) Constellation, operationally named NavIC, weighed much less around 1, 425 kg at liftoff.
  • They all rode the lighter Polar Satellite Launch Vehicle (PSLV), ISRO's workhorse launch rocket.
  • The last IRNSS Satellite, IRNSS-1I, was launched in April 2018 to replace an older, partially defunct satellite in the constellation.
  • IRNSS-1I was ISRO's ninth satellite for the NavIC constellation but is considered to be the eighth because the IRNSS-1H launched eight months earlier in August 2017 and originally intended to replace the older satellite was lost after the heat shield of the payload failed to open on time.
Image source: ISRO

3. About the second generation NavIC satellite

  • The second-generation satellite christened NVS-01, the first of ISRO's NVS series of payloads is heavier. Other than that:
    Atomic Clock: The satellite will have a Rubidium atomic clock onboard, a significant technology developed by India.
  • The Space-qualified Rubidium Atomic clock indigenously developed by Space Application Centre-Ahmedabad is an important technology which only a handful of countries possess.
  • L1 signals for better use in wearable devices: The Second-generation satellites will send signals in a third frequency, L1, besides the L5 and S frequency signals that the existing satellites provide, increasing interoperability with other satellite-based navigation systems.
  • The L1 frequency is among the most commonly used in the Global Positioning System (GPS) and will increase the use of the regional navigation system in wearable devices and personal trackers that use low-power, single-frequency chips.
  • Longer mission life:  The second-generation satellites will also have a longer mission life of more than 12 years. The existing satellites have a mission life of 10 years.

4. Significance of the atomic clock on board the NVS-01 payload

  • Several of the existing satellites stopped providing location data after their onboard atomic clocks failed this was the main reason for the launch of the replacement satellite in 2018.
  • Since a satellite-based positioning system determines the location of objects by accurately measuring the time it takes for a signal to travel to and back from it using the atomic clocks on board, the failure of clocks means the satellites are no longer able to provide accurate locations.
  • Currently, only four IRNSS satellites can provide location services, according to ISRO officials.
  • The other satellites can only be used for messaging services such as providing disaster warnings or potential fishing zone messages for fishermen.

5. The age of the satellites

  • This is the second major concern, besides the failing atomic clocks.
  • IRNSS-1A was launched into orbit on July 1, 2013, and the 1B and 1C satellites were launched the following year.
  • 1A is almost defunct- the failed 1H mission of 2018 was intended to replace this satellite and all the three oldest satellites in the constellation are close to the end of their 10-year mission lives.
  • At least three new satellites must be put into orbit to keep the seven-satellite constellation fully functional.

6. NAvIC constellation 

  • ISRO has been criticised by experts for not focussing on the development of the user segment until very late in the life of some of the satellites in the constellation.
  • No receivers were developed for the NavIC system, even though the satellites were sending signals.
    A 2018 report by the Comptroller and Auditor General (CAG) of India said that even though the Cabinet cleared funding of Rs 200 crores to develop user receivers in 2006, work on the project started only in March 2017, by which time seven launches had already taken place.
  • The receivers have now been developed and NavIC is in use for projects like public vehicle safety, power grid synchronisation, real-time train information systems and fishermen's safety.
  • Other upcoming initiatives such as common alert protocol-based emergency warning, time dissemination, geodetic network, and unmanned aerial vehicles are in the process of adopting the NavIC system.
  • Some cell phone chipsets such as the ones built by Qualcomm and Media Tek integrated NavIC receivers in 2019.
  • The Ministry of Electronics and IT is in talks with smartphone companies to urge them to make their handsets NavIC compatible.

7. Advantage of having a regional navigation system

  • India is the only country that has a regional satellite-based navigation system.
  • There are four global satellite-based navigation systems the American GPS, the Russian GLONASS (GLObalnaya NAvigatsionnnaya Sputnikovaya Sistema), the European Galileo and the Chinese Beidou.
  • Japan has a four-satellite system that can augment GPS signals over the country, similar to India's GAGAN (GPS Aided GEO Augmented Navigation).
  • Once fully operational with ground stations outside India for better triangulation of signals NavIC open signals will be accurate up to 5 meters and restricted signals will be even more accurate.
  • GPS signals by contrast are accurate up to around 20 meters. Work is underway to set up ground stations in Japan, France and Russia.
  • NavIC provides coverage over the Indian landmass and up to a radius of 1, 500 km around it.
  • In this region, NavIC signals will likely be available in even hard-to-reach areas.
  • Unlike GPS, NavIC uses satellites in high geo-stationery orbit the satellites move at a constant speed relative to Earth, so they are always looking over the same region on Earth.
  • NavIC signals come to India at a 90-degree angle, making it easier for them to reach devices located even in congested areas, dense forests or mountains.
  • GPS Signals are received over India at an angle.
  • With the use of NavIC picking up, the government has been looking at the possibility of increasing the coverage area of the system.
For Prelims: NavIC, Indian Space Research Organisation, GSLV, PSLV, IRNSS, GLONASS, GPS, GAGAN, Galileo, Beidou, 
For Mains: 
1.  What is NavIC? Explain the advantage of having a regional navigation system. (250 Words)
 
 
Previous Year Questions
 
1. With reference to the Indian Regional Navigation Satellite System (IRNSS), consider the following statements: (UPSC 2018)
1. IRNSS has three satellites in geostationary and four satellites in geosynchronous orbits.
2. IRNSS covers entire India and about 5500 sq. km beyond its borders.
3. India will have its own satellite navigation system with full global coverage by the middle of 2019.
Which of the statements given above is/are correct? 
A. 1 only     B. 1 and 2 only     C.  2 and 3 only        D. None
 
Answer: A
 
2. Full form of NavIC is : (CGPSC 2022) 
A. Navigation without International Control
B. Navigation with Indian Constellation
C. Navigation with Indian Coastal
D. Navigation with Indian Cooperation
 
Answer: B
 
3. ISRO is related to (SSC JE EE  2020) 
A. space research
B. agricultural research
C. seed research
D. marine research
 
Answer: A
 
4. With reference to India's satellite launch vehicles, consider the following statements:  (UPSC  2018) 
1. PSLVs launch the satellites useful for Earth resources monitoring whereas GSLVs are designed mainly to launch communication satellites.
2. Satellites launched by PSLV appear to remain permanently fixed in the same position in the sky, as viewed from a particular location on Earth.
3. GSLV Mk III is a four- staged launch vehicle with the first and third stages using solid rocket motors; and the second and fourth stages using liquid rocket engines.
Which of the statements given above is/are correct? 
A. 1 only                  B. 2 and 3             C. 1 and 2                    D.  3 only
 
Answer: A
 
5. In which of the following areas can GPS technology be used? (UPSC 2018)
1. Mobile phone operations
2. Banking operations
3. Controlling the power grids Select the correct answer using the code given below:
A. 1 only    B. 2 and 3 only   C.  1 and 3 only      D.  1, 2 and 3
 
Answer: D
 
 Source: The Indian Express

CLEAN NOTE POLICY

 

1. Context

The Reserve Bank of India (RBI) has decided to withdraw the Rs 2000 denomination banknotes from circulation. But existing notes will continue to be legal tender, the RBI announced. The central bank has advised the public to deposit Rs 2000 banknotes, which were introduced after Rs 500 and Rs 1000 notes were withdrawn during the demonetization exercise six years ago, into their bank accounts and /or exchange them into banknotes of other denominations at any bank branch.

2. Why has the RBI withdrawn Rs 2000 notes?

  • The Rs 2000 note was introduced in November 2016 under section 24(1) of the RBI Act, 1934, primarily with the objective of meeting the currency requirements of the economy expeditiously after the legal tender status of Rs 500 and Rs 1000 notes was withdrawn.
  • With the fulfillment of that objective, and once notes of other denominations were available in adequate quantities, the printing of Rs 2000 notes was stopped in 2018-19.
  • The RBI issued the majority of the Rs 2000 denomination notes before March 2017; these notes are now at the end of their estimated lifespan of 4-5 years.
  • This denomination is no longer commonly used for transactions besides, there is adequate stock of banknotes in other denominations to meet currency requirements.

3. Clean Note Policy

  • The Clean Note Policy seeks to give the public good-quality currency notes and coins with better security features, while soiled notes are withdrawn out of circulation.
  • The RBI had earlier decided to withdraw from circulation all banknotes issued before 2005 as they have fewer security features as compared to banknotes printed after 2005.
  • However, the notes issued before 2005 continue to be legal tender. They have only been withdrawn from circulation in conformity with the standard international practice of not having notes of multiple series in circulation at the same time.

4. Will the Rs 2000 banknotes continue to be legal tender?

  • The Rs 2000 banknote will continue to maintain its legal tender status, the RBI has said.
  • Members of the public can continue to use Rs 2000 banknotes for their transactions and also receive them in payment.
  • However, they are encouraged to deposit and/ or exchange these banknotes on or before September 30, 2023, the RBI said. 

5. Exchanging and Depositing Rs 2000 Notes

  • The exchange limit for Rs 2000 banknotes is set at Rs 20,000 at a time. Non-account holders can also exchange these banknotes at any bank branch.
  • Deposits into bank accounts can be made without limitations, subject to compliance with know your customer (KYC) norms and other applicable regulations.

6. Impact

  • The RBI governor stated that the impact of the withdrawal of 2000 rupees notes will be "very very marginal" on the economy because it accounts for only 10.8% of currency in circulation.
  • The withdrawal will not cause disruption "either in normal life or in the economy" as there is an adequate stock of banknotes in other denominations.
  • Some economists said that the withdrawal of the higher-value note is "a sensible form of demonetization" and could boost bank deposits at a time of high credit growth.
  • The withdrawal could ease the pressure on deposit rate hikes and could also result in a moderation in short-term interest rates and would help to curb black money and corruption.

7. Is there a limit on how much money you can exchange or deposit?

  • You can exchange Rs 2000 banknotes up to a limit of Rs 20,000 at a time. You don’t have to go to your bank a non-account holder of a bank also can exchange Rs 2000 banknotes up to a limit of Rs 20,000 at a time at any bank branch.
  • The exchange of Rs 2000 banknotes can also be made through business correspondents up to a limit of Rs 4000 per day for an account holder.
  • Deposits into bank accounts can be made without restrictions subject to compliance with extant Know Your Customer (KYC) norms and other applicable ones.

8. Could there be a repeat of the demonetization chaos of 2016?

  • It is unlikely that bank branches will witness chaos and long queues like in 2016 this time. The printing of Rs 2000 notes was stopped in 2018-19, and they are no longer commonly seen by the public, unlike the ubiquitous Rs 500 and Rs 1000 notes in 2016.
  • Also, the decision to withdraw Rs 500 and Rs 1000 notes was announced suddenly, taking the public by surprise. The exchange of Rs 2000 notes will begin only on May 23, so banks and the public have sufficient time.

9. What is Legal tender in India?

  • A legal tender is a form of currency that is recognized by law as an acceptable means for settling debts or obligations.
  • RBI is responsible for determining which forms of currency are considered valid for transactions.
  • It consists of coins issued by the Government of India under Section 6 of The Coinage Act, 2011, and banknotes issued by the Reserve Bank of India under Section 26 of the RBI Act, 1934.
  • Govt issues all coins up to ₹ 1,000, and 1 Rupee Note. RBI issues currency notes other than ₹ 1 Note.

10. Types of Legal Tenders in India

  • Legal tender can be limited or unlimited in character.
  • In India, coins function as limited legal tender. Coins with denominations equal to or higher than one rupee can be used as legal tender for amounts up to one thousand rupees.
  • Additionally, fifty paise (half a rupee) coins can be used as legal tender for amounts up to ten rupees.
  • Banknotes function as unlimited legal tender for any amount stated on them.
  • However, A new Section 269ST was added to the Income Tax Act as a result of the measures taken by the Finance Act 2017 to curb black money.
  • A cash transaction was restricted by Section 269ST and was only allowed to be worth up to Rs. 2 Lakh per day.
For Prelims: Reserve Bank of India (RBI), section 24(1) of the RBI Act, Clean Note Policy, Know your customer (KYC), Demonetization, Section 6 of The Coinage Act, 2011, Section 26 of the RBI Act, 1934.
For Mains: 1. What are the historical precedents for demonetization in India? How was the 2016 demonetization different from the previous ones? (250 Words)

Previous year Question

1. Which one of the following statements correctly describes the meaning of legal tender money? (UPSC 2018)
A. The money which is tendered in courts of law to defray the feel of legal cases
B. The money which a creditor is under compulsion to accept in settlement of his claims
C. The bank money in the form of cheques, drafts, bills of exchange, etc.
D. The metallic money in circulation in a country
Answer: B
Source: The Indian Express
 

Share to Social