NPCI Extends Market Cap Deadline for UPI Apps

Why in News?

The National Payments Corporation of India (NPCI) has extended the deadline for Third-Party App Providers (TPAPs) to comply with the 30% transaction cap on Unified Payments Interface (UPI) transaction volumes until 31st December 2026.

Key Points:

• Impact on Major UPI Players: This extension impacts major TPAPs like PhonePe and Google Pay, which together handle more than 80% of UPI transactions.

• Transaction Cap: The 30% transaction cap was introduced in November 2020 to mitigate concentration risks and ensure a balanced ecosystem in UPI transactions.

Compliance Requirement:

• Exceeding the Cap: TPAPs exceeding the 30% cap must halt onboarding new customers to comply with the rule.

• Based on Average Transaction Volume: The cap is determined based on the average UPI transaction volume over the past three months. TPAPs that have already exceeded this cap are given a grace period to comply, with phased reductions until the deadline in 2026.

Background:

• Initial Cap Introduction: The cap was first introduced in November 2020 to reduce risks of over-reliance on a few players in the UPI ecosystem.

• Deadline Extension: The deadline was extended in December 2022, with the current deadline being set for 31st December 2026.

NPCI:

• Establishment: NPCI was established by the Reserve Bank of India (RBI) and the Indian Banks' Association (IBA) under the Payment and Settlement Systems Act, 2007.

Third-Party App Providers (TPAPs):

• Role of TPAPs: TPAPs are non-bank entities that offer UPI-based financial services via mobile apps or platforms, acting as intermediaries between users and banks (referred to as sponsor banks). They are not part of banks or financial institutions.

Conclusion:

The NPCI's decision to extend the deadline for TPAPs to comply with the 30% transaction cap is aimed at ensuring a more equitable distribution of UPI transaction volumes, preventing the dominance of a few platforms. This move is significant for major players like PhonePe and Google Pay, as it impacts their expansion plans and user acquisition strategies.

Rural Poverty Alleviation in India

Context and Importance The Ministry of Rural Development recently showcased the progress of the Pradhan Mantri Awas Yojana-Gramin (PMAY-G), a flagship initiative aimed at eliminating poverty in rural India by ensuring affordable housing and improving living conditions. The scheme aims to reduce rural poverty and move towards creating "poverty-free villages."

Key Features of PMAY-G

• Introduction and Objective: PMAY-G was launched in 2016 to provide affordable housing to rural poor households. Beneficiaries are selected based on Socio-Economic Caste Census (SECC) 2011 data, validated through Gram Sabha approvals and geo-tagging.

• Financial Assistance:

  • Rs 1.20 lakh for plain areas, and Rs 1.30 lakh for Himalayan, Northeastern States, and Union Territories like Jammu & Kashmir and Ladakh.

  • Cost-sharing pattern: 60:40 between Centre and State in plain areas; 90:10 in North-Eastern/Himalayan states; 100% Centre funding in UT Ladakh.

• Convergence with Other Schemes:

  • Toilet support via Swachh Bharat Mission Grameen (SBM-G) (Rs 12,000 for toilet construction).

  • LPG connection via Pradhan Mantri Ujjwala Yojana.

  • Employment support via MGNREGA (90/95 unskilled workdays for construction).

• Target Demographics: 60% of the targets are earmarked for SC/ST households, ensuring social equity.

• Extension: Originally aiming for 2.95 crore houses by 2023-24, the scheme was extended to provide an additional 2 crore houses with a total outlay of Rs 3,06,137 crore for FY 2024-29.

• Achievements: By November 2024, over 3.21 crore houses had been sanctioned, with 2.67 crore completed. New mobile apps like Awas Plus and Awas Sakhi have been launched to enhance transparency and streamline beneficiary identification.

Poverty and Poverty Alleviation in India

• Poverty Definition: The World Bank defines poverty as a lack of resources to meet basic needs such as food, shelter, and healthcare. Absolute poverty is the inability to meet these needs, whereas relative poverty compares one's standard of living with others.

• Poverty Statistics:

  • National Family Health Survey (NFHS-5) indicates that 14.96% of India's population is multidimensionally poor, showing a significant decrease from previous surveys.

  • The Multidimensional Poverty Index (MPI) dropped from 29.17% in 2013-14 to 11.28% in 2022-23.

• Reduction in Rural Poverty:

  • Rural poverty fell to 7.2% in 2022-23 from 25.7% in 2011-12, while urban poverty decreased from 13.7% to 4.6%.

Other Key Schemes Contributing to Rural Poverty Alleviation

• Infrastructure Development:

  • PMGSY (Pradhan Mantri Gram Sadak Yojana)

  • Jal Jeevan Mission

• Social Protection:

  • National Social Assistance Program (NSAP)

  • Pradhan Mantri Jan Dhan Yojana for financial inclusion

  • Pradhan Mantri Jeevan Jyoti Bima Yojana for life insurance

• Livelihood Support:

  • MGNREGA for employment generation

  • National Rural Livelihood Mission (NRLM) and Pradhan Mantri Mudra Yojana for entrepreneurship support

  • Lakhpati Didi Initiative to boost rural women's income

• Health:

  • Ayushman Bharat for health coverage

  • Mission Indradhanush for immunization

Challenges in Rural Poverty Alleviation

1. Dependence on Agriculture: Agriculture faces challenges such as climate change, poor irrigation, and low productivity, limiting income.

2. Unemployment and Underemployment: Limited job opportunities outside agriculture, compounded by low skills and education, contribute to high poverty rates.

3. Limited Access to Services: Rural areas often face inadequate infrastructure, healthcare, and education services.

4. Land Ownership: Many rural families lack secure land rights, preventing investment in agriculture or other livelihoods.

5. Social Inequality: Marginalized groups, especially women, SCs, and STs, often have limited access to resources, which perpetuates poverty.

6. Migration: Migration of young educated individuals to cities creates a "brain drain" in rural areas.

Approach to Achieving Poverty-Free Rural India

1. Sustainable Development Goals (SDGs): Achieving SDGs such as No Poverty (SDG 1), Zero Hunger (SDG 2), Good Health (SDG 3), and Reduced Inequality (SDG 10) are critical for poverty alleviation.

2. Social Protection: Ensure full coverage for BPL families, including healthcare, old-age pensions, and disability benefits, to prevent relapses into poverty.

3. Employment and Livelihoods: Continue efforts under MGNREGA, identify skill gaps, and conduct training through Kaushal Kendras.

4. Infrastructure Development: Enhance access to roads, healthcare, schools, and digital platforms like eNAM to support farmers.

5. Social and Behavioral Change: Address issues like informal credit, substance abuse, and promote women’s participation in decision-making and economic activities.

6. Climate Resilience: Promote sustainable agriculture and disaster risk reduction measures in rural planning.

Conclusion

To make rural India poverty-free, a holistic approach is required that includes sustainable development, social protection, skill development, and infrastructure enhancement. The successful implementation of schemes like PMAY-G, combined with comprehensive policies addressing agriculture, education, health, and social inequality, is key to addressing rural poverty effectively.

India-Pledged Support to Maldives Amid Economic Issues

Context: The Foreign Minister of the Maldives is on a three-day visit to India, aimed at strengthening bilateral ties, particularly focusing on trade, investment, and addressing economic challenges facing the Maldives.

Maldives & Its Strategic Importance

1. Strategic Location: The Maldives holds significant strategic value, being positioned in the Indian Ocean. Its geographical placement along critical maritime trade routes between the Gulf of Aden and the Strait of Malacca makes it a crucial point for global trade, particularly for India.

2. Trade Routes: The Maldives functions as a “toll gate” for maritime trade, facilitating the passage of nearly half of India’s external trade and 80% of its energy imports. Its stability directly impacts the broader security and trade interests of India.

3. Countering China's Influence: The Maldives offers an opportunity for India to counterbalance China’s increasing influence in the Indian Ocean region, which is vital for regional stability and the balance of power.

India-Maldives Bilateral Relations

1. Regional Cooperation:

   • Both nations are founding members of SAARC (South Asian Association for Regional Cooperation) and other regional forums like the South Asian Economic Union. They are also signatories of the South Asia Free Trade Agreement.

2. Economic Partnership:

   • India became the Maldives' largest trade partner in 2023.

   • India is also one of the largest investors and a key source of tourism for the Maldives. India accounts for about 11.8% of the Maldives' tourism market.

   • Infrastructure projects like the Greater Male Connectivity Project (GMCP), a $530 million initiative, aim to enhance connectivity between Male and neighboring islands, which will support economic growth, particularly the development of Gulhifalhu Port.

3. Defense and Security Cooperation:

   • Since 1988, defense and security cooperation have been vital. India provides significant training and assistance to the Maldives, with estimates suggesting that 70% of Maldives' defense training is conducted by India.

   • A comprehensive Defense Action Plan was signed in 2016 to further consolidate security partnerships.

Challenges in India-Maldives Relations

1. Domestic Political Instability:

   • The Maldives has faced political upheavals and government changes, creating uncertainties that complicate long-term collaboration and project implementation.

2. Chinese Influence:

   • China's economic footprint in the Maldives has been growing, with substantial investments in infrastructure and lending schemes that critics claim lead to debt-trap diplomacy, which poses a challenge to India's strategic interests.

3. Non-traditional Security Threats:

   • Issues such as piracy, terrorism, and drug trafficking continue to be pressing concerns in the region, requiring close collaboration and intelligence sharing between India and the Maldives.

4. Trade Imbalance:

   • There exists a significant trade imbalance between the two countries, with calls for a more diversified trade partnership to ensure mutual benefit.

The Way Ahead for India-Maldives Relations

• Geopolitical Dynamics: The relationship between India and the Maldives is shaped by both geopolitical realities and leadership changes. Despite challenges, India remains committed to supporting the Maldives in various sectors.

• Strengthening Bilateral Ties: Through economic support, security cooperation, and strategic infrastructure projects, India can continue to foster a resilient, mutually beneficial partnership with the Maldives.

• Addressing Challenges: By recognizing and addressing issues like domestic instability, trade imbalances, and external influences, India and the Maldives can work towards a more stable and prosperous future, enhancing regional security and promoting shared prosperity in the Indian Ocean region.

Conclusion:

India’s support to the Maldives reflects a longstanding commitment to regional stability, security, and economic cooperation. Despite challenges, both nations have the opportunity to build on their strategic relationship, contributing to a stable and prosperous South Asian region.

Right to Property

The Supreme Court's recent judgment reaffirms the importance of the Right to Property as a Constitutional right under Article 300A and a human right in a welfare state. The decision has significant implications for governance, fairness in land acquisition, and timely compensation for property owners.

Key Takeaways from the Judgment

1. Recognition of Article 300A:

   • The Right to Property is not a Fundamental Right but remains protected as a Constitutional Right.

   • It ensures that individuals cannot be deprived of their property except through legal authority and processes.

2. Adequate Compensation:

   • The Court mandated that fair market value of the land must be considered during compensation, particularly accounting for delays.

   • Compensation delays caused by state authorities diminish the real value due to inflation and lost financial opportunities.

3. Case Specifics:

   • The judgment arose from the Bengaluru-Mysuru Infrastructure Corridor Project (BMICP) case.

   • Landowners were deprived of compensation since 2005, prompting the Court to direct the market value to be determined as of April 2019, ensuring justice to landowners.

4. Judicial Intervention:

   • The Supreme Court exercised its Article 142 powers to provide equitable relief.

   • The ruling aimed to rectify delays attributed to state authorities' inefficiency and uphold the principle of just compensation.

5. Implications of Timely Compensation:

   • Delay in compensation undermines its value and erodes public trust in government processes.

   • The Court emphasized accountability for authorities and adherence to constitutional principles in governance.

Historical Context of Right to Property

1. Pre-1978:

   • Initially a Fundamental Right under Article 19(1)(f) and Article 31.

   • Land reform laws led to frequent conflicts, requiring several amendments.

2. Post-1978:

   • The 44th Constitutional Amendment removed the Right to Property from the list of Fundamental Rights.

   • It was redefined under Article 300A as a Constitutional Right, ensuring property can only be acquired through legal authority.

Implications of the Judgment

1. For Governance:

   • Enhances accountability of state authorities to ensure timely and fair compensation in land acquisitions.

   • Establishes legal precedent for addressing bureaucratic inefficiencies in land-related matters.

2. For Property Owners:

   • Provides protection against arbitrary deprivation of property.

   • Reinforces the principle of just compensation aligned with inflation and market value.

3. Economic and Social Justice:

   • Highlights the economic realities of delayed compensation and inflation's impact on property owners.

   • Reflects the judiciary's role in protecting citizens' rights in welfare governance.

Way Forward

• Strengthening Legal Frameworks: Ensure prompt procedures and better oversight in land acquisition cases.

• Efficient Disbursal Mechanisms: Establish timelines for determining and paying compensation.

• Judicial Vigilance: Maintain the judiciary's proactive role in addressing state inefficiencies and upholding constitutional principles.

This judgment serves as a reminder of the importance of respecting constitutional rights and ensuring fairness in state actions concerning property. It underscores the judiciary's role as a guardian of individual rights in a welfare-oriented legal framework.