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DAILY NEWS ANALYSIS

Monthly DNA

28 Nov, 2022

22 Min Read

Digital Personal Data Protection Bill 2022

GS-II : Governance Data Privacy

Digital Personal Data Protection Bill 2022

  • The Union Government has released a new version of the Personal Data Protection Bill, now known as the Digital Personal Data Protection Bill, 2022.
  • The bill was introduced three months after the Personal Data Protection Bill of 2019.

What is the Bill's Seven Principles for 2022?

  • Organisations must use personal data in a way that is legal, fair to the individuals involved, and transparent to individuals.
  • Second, personal information must be used only for the purposes for which it was collected.
  • The third principle emphasises data minimization.
  • When it comes to data collection, the fourth principle emphasises data accuracy.
  • The fifth principle states that personal data should not be "stored perpetually by default" and that storage should be limited to a set period of time.
  • According to the sixth principle, there should be reasonable safeguards in place to ensure "no unauthorised collection or processing of personal data."
  • According to the seventh principle, "the person who decides the purpose and means of processing personal data should be accountable for such processing."

What are the Key Elements of the Digital Personal Data Protection Bill?

Principal and Fiduciary Data:

  • The individual whose data is being collected is referred to as the Data Principal.
  • In the case of children under the age of 18, their parents or legal guardians will be considered their "Data Principals."
  • The entity (individual, company, firm, state, etc.) that determines the "purpose and means of processing an individual's personal data" is known as a data fiduciary.
  • Personal data is defined as "any data that can be used to identify an individual."
  • Processing is defined as "the entire cycle of operations that can be performed on personal data."

Important Data Fiduciary:

  • Significant Data Fiduciaries handle a large volume of personal data. The Central Government will decide who falls into this category based on a variety of factors.
  • Such organisations will be required to appoint a "Data protection officer" as well as an independent Data Auditor.

Individual Rights: Information Access:

  • Individuals should be able to "access basic information" in languages specified in the Indian Constitution's eighth schedule, according to the bill.
  • Individuals must provide consent before their data is processed, and "every individual should know what items of personal data a Data Fiduciary wishes to collect and the purpose of such collection and subsequent processing."
  • Individuals may also withdraw consent from a Data Fiduciary.
  • Data principals will have the right to demand that data collected by the data fiduciary be erased and corrected.
  • Right to Nominate: Data principals will also have the option of naming someone to exercise these rights in the event of their death or incapacity.
  • Data Protection Board: The Bill also proposes establishing a Data Protection Board to ensure that the Bill is followed.
  • Consumers can file a complaint with the Data Protection Board if they receive an unsatisfactory response from the Data Fiduciary.
  • Cross-border Data Transfer: The bill allows for the storage and transfer of data across borders to "certain notified countries and territories," as long as they have a suitable data security landscape, and the government can access data belonging to Indians from there.

Financial Sanctions:

  • For Data Fiduciary: The bill proposes severe penalties for businesses that suffer data breaches or fail to notify users when breaches occur.
  • Penalties will range between Rs. 50 crores and Rs. 500 crores.
  • For Data Principal: A user who submits false documents when signing up for an online service or files frivolous grievance complaints may be fined up to Rs 10,000.
  • Exemptions: The government may exempt certain businesses from complying with the bill's provisions based on the number of users and volume of personal data processed by the entity.
  • This was done with startups in mind, who had complained that the Personal Data Protection Bill, 2019, was too "compliance intensive."
  • National security exemptions have been preserved, as in the previous 2019 version.
  • The Centre has been given the authority to exempt its agencies from the Bill's provisions in the interests of India's sovereignty and integrity, state security, friendly relations with foreign states, public order maintenance, or preventing incitement to any cognizable offence.

What is the significance of the Digital Personal Data Protection Bill?

  • In contrast to the previous Bill's contentious requirement of local storage of data within India's geography, the new Bill makes significant concessions on cross-border data flows.
  • It takes a softer stance on data localisation requirements and allows data transfer to specific global destinations, which is likely to encourage country-to-country trade agreements.
  • The bill recognises the data principal's right to postmortem privacy (Withdraw Consent), which was not recognised in the PDP Bill, 2019, but was recommended by the Joint Parliamentary Committee (JPC).

How has India improved its data protection regime?

Union of India vs. Justice K. S. Puttaswamy (Retd) 2017:

  • In Justice K. S. Puttaswamy (Retd) vs Union of India, a nine-judge bench of the Supreme Court unanimously held in August 2017 that Indians have a constitutionally protected fundamental right to privacy that is an intrinsic part of life and liberty under Article 21.

2017 B.N. Srikrishna Committee:

  • In August 2017, the government appointed a committee of experts for data protection, chaired by Justice B N Srikrishna, which submitted its report in July 2018 along with a draft Data Protection Bill.
  • The Report includes numerous recommendations to strengthen Indian privacy law, such as restrictions on data processing and collection, a Data Protection Authority, the right to be forgotten, data localization, and so on.

Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021:

  • IT Rules (2021) require social media platforms to be more cautious about the content on their platforms.

Source: The Hindu

Non-performing assets

GS-III : Economic Issues NPA

Non-performing assets

  • According to RBI data, the mega write-off exercise has enabled banks to reduce their non-performing assets (NPAs) or defaulted loans by Rs 10,09,510 crore ($123.86 billion) over the last five years.
  • However, banks have only been able to recover 13% of it so far.

Concerning the news

  • This massive write-off would have been enough to cover 61% of India's projected gross fiscal deficit of Rs 16.61 lakh crore in 2022-23.
  • As of March 2022, the banking sector reported a decrease in gross NPAs to Rs 7, 29,388 crores, or 5.9 percent of total advances.
  • In 2017-18, gross NPAs were 11.2 percent.
  • When a bank writes off a loan, it removes it from the bank's asset book.
  • When a borrower fails to make loan payments and there is little chance of recovery, the bank writes off the loan.
  • The lender then removes the defaulted loan, or NPA, from the assets side of the ledger and records the amount as a loss.
  • Public sector banks reported the highest number of write-offs at Rs 734,738 crore, accounting for nearly 73% of the total.

What exactly is NPA?

  • When a loan's principal or interest payment is 90 days late, it becomes an NPA.

NPA Varieties

  • Sub Standard: A sub-standard asset is one that has been classified as a non-performing asset for a period of less than twelve months.
  • Doubtful: A doubtful asset is one that has remained an NPA for more than a year.
  • A loss asset is one that has already been identified by the bank or an external institution as a loss, but it has not yet been completely written off due to its recovery value, however small.

What causes banks to write off loans?

  • When a loan goes bad, a bank writes it off when the chances of recovery are slim.
  • It assists the bank in reducing not only its NPAs but also its taxes because the written-off amount can be deducted from profit before tax.
  • Following a write-off, banks are expected to continue their efforts to recover the loan through a variety of means. They must also make provisions.

Reasons for Banking NPA

The economic downturn

  • Prior to the 2008 financial crisis, India's economy was booming.
  • During this time, banks extended large amounts of credit to corporations in the hope that the good times would continue in the future.

Earnings of corporations

  • Their ability to repay loans was hampered by low earnings. This is one of the primary reasons for the rise in NPAs at public sector banks.

Lending standards have been relaxed.

  • Another major contributor to rising NPAs was the loosening of corporate lending standards.
  • Their financial situation and credit rating were not thoroughly examined.

Banks in the public sector

  • It provides a large portion of credit to industries, and it is this portion of credit distribution that accounts for a large portion of NPA.

The sector of priority sector lending (PSL)

  • This has significantly contributed to the NPAs. Agriculture, education, housing, and MSMEs are among the priority sectors.

Promoters' credit default

  • There have also been cases of promoters defaulting on credit, where funds were diverted by over-invoicing imports, sourcing through a promoter-owned subsidiary abroad, or exporting to shell companies and then declaring that they defaulted.

Problems with NPA

Provisioning

  • Bad loans force banks to set aside a portion of their operating revenue to account for bad loans, a process known as provisioning.
  • Capital Adequacy Ratio (CAR) or Capital to Risk (weighted) Assets Ratio are technical terms for provisioning (CRAR).

Profitability is lower.

  • Banks are required to make bad loan provisions from their operating income.
  • The bank in question becomes less profitable as a result of having to use some of its profits from other loans to offset the loss on the bad loans.

Risk-averse

  • Officials at such banks are hesitant to extend loans to potentially risky business ventures for fear of exacerbating an already high level of non-performing assets (or NPAs).

The stock market is in decline.

  • Any decrease in the perceived valuation of banks may result in a loss of share value, resulting in a general decline in the share markets. This could wipe out shareholders' wealth in the financial markets.

Increasing Bad Loans

  • Despite various efforts, a significant amount of NPAs remain on bank balance sheets, owing to the fact that the stock of bad loans revealed by the Asset Quality Review is not only large, but also fragmented across various lenders.

The way forward

  • NPAs are written off on a regular basis by banks in order to clean up their balance sheets.
  • Its primary goal is to clean up the balance sheet and improve tax efficiency.
  • Loans are written off from the books at the Head Office in Technically Written Off accounts, but the right to recover is not waived.

Read Also: RBI push to de-risk banking sector chokes the flow of funds to large PSUs

Source: The Indian Express

Nicobar Hodi Craft

GS-III : Economic Issues GI Indicators

Nicobar Hodi Craft

  • The Andaman and Nicobar Islands recently filed an application for the Geographical Indication (GI) tag for the Nicobari Hodi craft.
  • This is the Union Territory's first application for a tag for one of its products.
  • Previously, Mithila Makhana received the GI designation from the government.

What is Nicobari Hodi?

  • The hodi is the traditional craft of the Nicobari tribe. It is an outrigger canoe, which is very common in the Nicobar group of islands.
  • The technical skills required to construct a hodi are based on indigenous knowledge passed down to the Nicobarese from their forefathers.
  • The hodi is constructed from either locally available trees or trees from neighbouring islands, and its design varies slightly from island to island.
  • Considerations include the length of the finished canoe, which must be 12 times its width, and the length of the undressed tree trunk, which must be 15 times its width.
  • Hodis are used to transport people and goods from one island to another, to transport coconuts, and for fishing and racing.
  • The tuhet, a group of families led by a chief, regard the hodi as a valuable asset. Between islands and villages, Hodi races are held.

What exactly is a Geographical Indication (GI) label?

  • The Geographical Indication (GI) is a symbol used to identify goods with unique characteristics that originate in a specific geographical area.
  • The Geographical Indications of Goods (Registration and Protection) Act of 1999 aims to improve the registration and protection of geographical indications relating to goods in India.
  • The World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights governs and directs it (TRIPS).
  • It was decided, and it is also stated in Articles 1 (2) and 10 of the Paris Convention, that industrial property and geographical indications are elements of intellectual property.
  • It is primarily a natural, agricultural, or manufactured product (handicrafts and industrial goods).
  • Validity: This tag is valid for ten years after which it can be renewed.
  • Importance: Once a product receives this label, no individual or company may sell a similar item under that name.
  • A product's GI registration provides legal protection and prevents unauthorised use by others.
  • The GI tag aids in the promotion of the product's exports.
  • It also gives customers confidence in the product's authenticity.

Registration of Geographic Indications:

  • There is a proper process for registering geographical indications products, which includes application filing, preliminary scrutiny and examination, show cause notice, publication in the geographical indications journal, opposition to registration, and registration.
  • Any association of people, producers, organisations, or authorities established by or under the law is eligible to apply.
  • The applicant must represent the producers' interests.
  • The Geographical Indications Registry, which is in charge of GI Goods administration, is established in Chennai.

Source: The Hindu

Great Knot

GS-III : Biodiversity & Environment Wildlife & Fauna

Great Knot

  • A Great knot from Russia has found its way to Kerala’s coast, flying over 9,000 km for a winter sojourn.
  • Great knots to be re-sighted in India among the nearly thousand ones tagged with MOSKVA rings in the Kamchatka peninsula in eastern Russia.

About Great knot

  • Scientific Name: Calidris tenuirostris
  • It is a small wader.
  • It is the largest of the calidris species
  • Habitat: Grassland, Marine Neritic, Marine Intertidal, Marine Coastal/Supratidal.
  • This species breeds in northeast Siberia, Russia, wintering mainly in Australia, but also throughout the coastline of South-East Asia and on the coasts of India, Bangladesh, Pakistan, and the eastern coast of the Arabian Peninsula.
  • Threats Information: Loss of intertidal stopover habitats in the Yellow Sea region is thought to be a key driver in the population declines of shorebirds
  • It is also potentially threatened by climate change.
  • Recent evidence shows a very rapid population decline caused by the reclamation of non-breeding stopover grounds, and under the assumption that further proposed reclamation projects will cause additional declines in the future.
  • Protection Status: It is listed as an 'endangered' species by the IUCN.
  • It is listed in Appendix I of the Convention on the Conservation of Migratory Species of Wild Animals.

Source: The Hundu

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