Q1. What steps should be taken by SEBI in order to regulate and monitor cryptocurrencies in India?
Bitcoins were created in 2008 and they shot to fame in 2013 when the value of bitcoin went close to $1,000. While in the initial phase, few Indians mined bitcoins and stashed them away in wallets on their computers, there were no other activities involving crypto assets then. Those wanting to buy or sell bitcoins had to do so on trading platforms overseas.
But since 2015, numerous exchanges that enable trading in bitcoin and other cryptocurrencies have sprung up. Many entrepreneurs are also making Initial Coin Offerings (ICOs), a way of crowd funding through cryptocurrencies. The number of investors putting money in these assets have increased manifold.
The problem is that the entire ecosystem is operating in a regulatory vacuum. Cryptocurrency exchanges are not regulated by SEBI or any other regulator. It’s unclear if they have sufficient capital to guarantee the trades on these platforms, whether the promoters have the requisite qualification and governance track record, if the processes followed are aboveboard.
Of greater concern is the fact that some investors are being told that they will get a fixed return every month if they invest regular sums in some cryptocurrencies. This sounds dubious since fixed returns are next to impossible if money is invested in exchange-traded assets. There are no rules governing fund-raising through ICOs or the end-use of these funds.
SEBI’s inaction in this area is likely to cost investors dear, creating a problem similar to the NSEL scam, wherein the regulators kept tossing the ball to each other about who should regulate the exchange, which meanwhile wound-up, causing huge losses to many.
There appears to be genuine interest among many to own these assets and there is no reason why trading in these should be banned altogether. Such an act will only make the trades shift to the grey market or overseas.
But SEBI has to ensure that investors in these exchanges are protected. It can take one of the two routes. One, allow cryptocurrency exchanges to continue by setting out a regulatory framework governing these exchanges and by taking on the supervision of these trades.
An easier way to monitor these trades could be by allowing these assets to trade on the regular stock exchanges such as the BSE and the NSE, in the derivative segment. Bitcoin futures are being traded on CBOE (Chicago Board Options Exchange). A similar instrument can be allowed on the larger stock exchanges.
Q2. Throw light on the Draft of New Telecom Policy
The government came out with a new draft for telecom policy which aims to create a roadmap for emerging technologies such as 5G, artificial intelligence, robotics, internet of things, cloud computing and machine to machine communications.
Jobs and investment-The draft which was released by the Department of Telecommunications or DoThas also laid out plans to create 4 million jobs, attract $100 billion foreign investment by 2022. The telecom policy is put in place to give all states, central agencies and other key players like the telecom companies and even start-ups a general idea of what can be expected from the government in the coming years.
Major Goals– increasing India’s contribution to global value chains, creation of innovation led start-ups in digital communications sector, creation of globally recognized IPRs in India, development of standard essential patents in the field of digital communication technologies, train/re-skill 1 million manpower for building new age skills, expand IoT ecosystem to 5 billion connected devices and accelerate transition to industry 4.0.
Regulation of telecom sector-To enter this grand scheme, the government also aims to streamline regulatory reforms and processes to make them relevant, transparent, accountable and forward-looking. According to the draft, these regulatory guidelines will also ensure better investments, innovations and consumer interest.
Net neutrality– Recognising the need to uphold the core principles of net neutrality, the government plans to amend the ‘license agreements to incorporate the principles of non-discriminatory treatment of content, along with appropriate exclusions and exceptions as necessary’. It also seeks to introduce appropriate disclosure and transparency requirements to ensure compliance with net neutrality principles.
Contribution to GDP-The government said that the new telecom policy seeks to unlock the transformative power of digital communications networks. To achieve this, it laid out strategic objectives that include ‘provisioning of broadband for all, enhancing the contribution of the Digital Communications sector to 8 per cent of India’s GDP from 6 per cent in 2017, propelling India to the top 50 nations in the ICT Development Index of ITU from 134 in 2017, enhancing India’s contribution to global value chains and ensuring digital sovereignty’.
Heavy Debt issue-The draft also addressed the heavy debt to the telecom sector and pledged help by reviewing license fees, spectrum usage charges, and universal service obligation fund levy, all of which add to cost of telecom services, under the new policy for enhancing ease of doing business in the sector.
The government has also set a goal to provide 1Gbps of internet speed to all gram panchayats in the country as early as 2020. This speed is expected to be enhanced to 10Gbps by year 2022.
Q3. 100 % Eletrification goal per-se is a mean goal till the time definition of electrification is not changed.
India crossed a historic milestone by reaching electricity cables to its last un-electrified village in Manipur on April 28. So, on paper, all of the 5.97 lakh villages have been electrified; of these, 18,453 were electrified between April 1, 2015, and now. To place this achievement in perspective, 1.25 lakh villages or a quarter of the total were without electricity, when the Rajiv Gandhi Grameen Vidyutikaran Yojana was announced in 2005, which works out to a rate of electrification of about 11,900 a year between 2005 and 2014.
Improvement in Electricity- As of today, 82 per cent of all households have electricity, a marked improvement over the 50 per cent in 2005. A financial commitment of over ₹50,000 crore since 2005 has played a role here.However, village and household electrification call for a sustained effort in improving the quality, reliability and affordability of power.
Definition of electricity-It is just as well that the Centre, in September 2014, set aside over ₹75,000 crore to connect the remaining households, separate agriculture and household feeder lines and beef up infrastructure. Having achieved 100 per cent village electrification), the Centre should ramp up its definition of an electrified village, going beyond providing just 10 per cent of households with power and connecting government institutions.
Supply to Demand side reform-The definition should entail covering a larger population and ensuring minimum hours of supply. The policy focus needs to shift from supply-side solutions alone — since installed capacity has been created in ample measure over the last 15 years — to improving demand. Over 40 per cent of households use less than 50 units a month, owing to high tariffs at the lowest rung. Meanwhile, discoms, which bear a loss of ₹4 per unit, are averse to lowering rates. Hence, a situation of underutilised capacity co-exists with power outages in rural areas in particular. The solution is to rationalise rates, so that discoms and consumers benefit, in turn generating funds for upkeep of infrastructure.
Role of electricity in transforming countries-Electricity has transformed societies and economies the world over, be it post-Depression America, China or more recently South Africa.
With “an additional 40 million people gaining access each year since 2011”, as pointed out by the International Energy Agency, the economic prospects and quality of life of millions of Indians have improved. The key is to alter the economics of power distribution in particular, so that electricity supply at the bottom of the pyramid goes beyond running a light or a fan to powering economic activity.
Q4.Throw light on the principles that individuals employed in the public sector must follow?
– individuals should act solely in the public interest and not for personal gain or that of friends and family
– individuals should avoid actions which would place them under financial or other obligations whereby the person holding their obligation could influence their public duties
– all choices, especially those regarding awarding contracts, rewarding or providing benefits to others and make public appointments must be made purely on merit
– individuals are responsible for their own actions and are accountable to others.
They must subject themselves to whatever scrutiny comes with their office
– individuals must be open about their decisions and actions.
Information regarding the reasons for their decisions must be freely available.
Restrictions on information are only permitted when it is in the wider public interest
– where individuals have private interests which relate to their public ones, they should declare them and seek to resolve any conflict to protect the public interest
– individuals must promote and respect the other six principles through leadership and example