DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam –6th June 2024
Archives (PRELIMS & MAINS Focus) OPEN NETWORK FOR DIGITAL COMMERCE (ONDC) Syllabus Prelims – CURRENT EVENT Context: The government-backed Open Network for Digital Commerce (ONDC) recorded an all-time high of 8.9 million transactions across retail and ride-hailing segments in May. This represented a robust 23 per cent month-on-month increase in total transaction volume, the ONDC said. Background:- The Open Network for Digital Commerce (ONDC) is a government-backed initiative in India that aims to create an open and interoperable e-commerce ecosystem. About Open Network for Digital Commerce (ONDC) The ‘Open Network for Digital Commerce’ (ONDC), is a Government of India (GoI) backed technology infrastructure. It is a network-centric model, wherein buyers and sellers can transact irrespective of the platforms/applications they use as long as “platforms/applications are connected to this open network”. In simple terms, ONDC is like a digital road network over which different digital storefronts (in the form of buyer and seller apps) can be built. The digital road network aims to enable e-commerce traffic to travel across these different digital storefronts seamlessly, thereby allowing buyers and sellers to transact regardless of the application / platform they use. This is a significant departure from existing platform centric models of e-commerce where buyers and sellers can only interact within walled platforms. To illustrate, today, a seller on Amazon cannot reach a buyer on Flipkart, and vice versa. These walled platforms have increasingly dominated transaction volumes in India’s ecommerce market over the years, and today are able to wield immense power and control over e-commerce supply chains. This concentration of power and control has led to harmful behaviour such as self-preferencing by platforms or leveraging data to distort competition, which squarely impacts MSME businesses and the consumer interest. ONDC is GoI’s answer to this market distortion. ONDC is expected to make e-Commerce more inclusive and accessible for consumers. Consumers can potentially discover any seller, product or service by using any compatible application or platform, thus increasing freedom of choice for consumers. It will enable the consumers to match demand with the nearest available supply. This would also give consumers the liberty to choose their preferred local businesses. Thus, ONDC would standardize operations, promote inclusion of local suppliers, drive efficiencies in logistics and lead to enhancement of value for consumers. ONDC was incorporated as a Section 8 (NON-PROFIT) company in December 2021, with the Quality Council of India and Protean eGov Technologies Limited as Founding Members. Various public and private sector entities have invested in ONDC, including Punjab National Bank, State Bank of India, Axis Bank, Kotak Mahindra Bank, BSE Investments, Central Depository Services, ICICI Bank, and the Small Industries Development Bank of India. It is important to note that the relationship between the GoI and ONDC is not legally defined and it does not flow from an act of parliament. Source: Internet freedom foundation APPRECIATION AND DEPRECIATION OF RUPEE Syllabus Prelims – ECONOMY Context: Between April-end 2014 and April 2024 – roughly the time the Narendra Modi-government has been in office – the rupee has depreciated by 27.6% against the US dollar, from Rs 60.34 to Rs 83.38. Background: India trades not only with the US. It exports goods and services to other countries as well, while also importing from them. The strength or weakness of the rupee is a function of its exchange rate with not just the US dollar, but also with other global currencies. Key takeaways Appreciation of the Rupee: When the Rupee appreciates, it gains strength against the Dollar. This means you need fewer Rupees to buy a Dollar. For example, if the value of 1 USD decreases from ₹75 to ₹70, this change is termed as an appreciation of the Rupee Here are some impacts of Rupee appreciation: Exports: Rupee appreciation affects exporters negatively as they may lose importers because they find imports from India more costly. Imports: Importers can import more quantity at a less price. This is because they need fewer Rupees to buy a Dollar. Depreciation of the Rupee: When the Rupee depreciates, it loses strength against the Dollar. This means you need more Rupees to buy a Dollar. For example, if the value of 1 USD increases from ₹70 to ₹75, this change is termed as depreciation of the Rupee. Here are some impacts of Rupee depreciation: Exports: Exporters stand to gain the most from Rupee depreciation as it makes exports more competitive. Imports: Imports will become costly. This is because importers need more Rupees to buy a Dollar. Inflation: The biggest impact of a weakening Rupee is inflation, given India imports more than 80% of its crude oil. This is because the cost of imported goods increases due to a reduction in the value of Rupee. IT Sector: The Indian IT sector, which focuses heavily on exports, can achieve more revenue from their global clients due to the decline of the Rupee value. Remember, the appreciation and depreciation of the Rupee are strongly influenced by the change in demand or supply for the Rupee and the Dollar. Source: Indian Express PRESTONE CURVE Syllabus Prelims – ECONOMY Context: The Preston curve refers to a certain empirical relationship that is witnessed between life expectancy and per capita income in a country. The average per capita income of Indians rose from around ₹9,000 per year in 1947 to around ₹55,000 per year in 2011. During the same period, the average life expectancy of Indians rose from a mere 32 years to over 66 years. Background: The empirical relationship was first proposed by American sociologist Samuel H. Preston in his 1975 paper “The changing relation between mortality and level of economic development”. About PRESTON CURVE The Preston curve is an empirical relationship between life expectancy and real per capita income. It is named after Samuel H. Preston who first described it in 1975. Preston studied the relationship for the 1900s, 1930s and the 1960s and found it held for each of the three decades. Preston found that people living in richer countries generally had longer life spans when compared with people living in poorer countries. This is likely because people in wealthier countries have better access
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