Today's Headlines

Today's Headlines - 28 January 2023

T+1 settlement cycle comes into effect

GS Paper - 3 (Economy)

After ChinaIndia became the second country in the world to start the ‘trade-plus-one’ (T+1) settlement cycle in top listed securities from 27 January 2022, bringing operational efficiency, faster fund remittances, share delivery, and ease for stock market participants.

What is the T+1 settlement plan?

  1. The T+1 settlement cycle means that trade-related settlements must be done within a day, or 24 hours, of the completion of a transaction.

  2. For example, under T+1, if a customer bought shares on 25 January 2023, they would be credited to the customer’s demat account on 26 January 2023. This is different from T+2, where they will be settled on 27 January 2023.

  3. As many as 256 large cap and top mid-cap stocks, including Nifty and Sensex stocks, will come under the T+1 settlement from 27 January 2023.

  4. Until 2001stock markets had a weekly settlement system. The markets then moved to a rolling settlement system of T+3, and then to T+2 in 2003.

  5. T+1 is being implemented despite opposition from foreign investors. The United States, United Kingdom and Eurozone markets are yet to move to the T+1 system.

What are the benefits of T+1?

  1. In the T+1 format, if an investor sells a share, she will get the money within a day, and the buyer will get the shares in her demat account also within a day.

  2. The shorter trade settlement cycle that is set to be implemented augurs well for the Indian equity markets from a liquidity perspective, and it shows how well we have grown on the digital journey to ensure seamless settlements within 24 hours.

  3. This will also help investors in reducing the overall capital requirements with the margins getting released on T+1 day, and in getting the funds in the bank account within 24 hours of the sale of shares.

  4. The shift will boost operational efficiency as the rolling of funds and stocks will be faster.

Why are foreign investors opposed?

  1. Foreign investors were against SEBI’s T+1 proposal, and had written to the regulator and the Finance Ministry about the operational issues faced by them, as they operate from different geographies.

  2. Among the issues raised by them were time zone difference, information flow process, and foreign exchange problems.

  3. Foreign investors said they would also find it difficult to hedge their net India exposure in dollar terms at the end of the day under the T+1 system.

  4. In 2020, Sebi had deferred the plan to halve the trade settlement cycle to one day (T+1) following opposition from foreign investors.


The Railways’ AI-based project

GS Paper - 3 (Emerging Technology)

The Indian Railways has concluded the trial of an Artificial Intelligence (AI) program it built to fix a perennial issue — long waiting lists for tickets. The AI-driven program has, for the first time, allocated vacant berths in over 200 trains in such a way that fewer people need to turn away without a confirmed ticket. The waiting lists on these trains, as a result, have seen a curtailment.

Idea Train Profile

  1. Made by Railways’ in-house software arm Centre for Railway Information Systems (CRIS), this AI module, called Ideal Train Profile, was fed with information like how millions of passengers booked tickets on these trains, which origin-destination pairs were a hit and which were flops at what time of the year, which seats remained vacant for what portion of a journey, etc.

  2. The combination of “training data” the AI has been fed goes back three years.

Why was its need felt?

  1. In internal policy discussions, the Railways has flagged how it is not practically possible to keep physically increasing the number of trains in every sector based on demand.

  2. But if a passenger does not get a confirmed train ticket, she will turn away from Indian Railways and choose other modes like flights for long distances and buses for short distances.

  3. Thus, the solution is to take a re-look at its own inventory of berths and apportion them intelligently.

  4. Currently, the passenger is handed out a wait-listed ticket and asked to wait until four hours prior to departure, when the final seat chart is prepared, to see if she made the list.

  5. This is because a large number of berths are earmarked for various quotas and various origin-destination combinations of the train’s routes. Not all that is actually utilised. So the real picture becomes clear only at the time of preparation of the charts.


India’s BharOS replace Android, iOS

GS Paper - 3 (Information and Communication Technology)

BharOS is being pitched as India’s answer to the Google-owned Android and Apple’s iOS, the two most dominant mobile operating systems in the world. BharOS’s endorsement by the government not only signals India’s ambitions to have a localised competitor to Silicon Valley operating systems, but also ensures that competitors have a fair chance to succeed against these heavyweights.

Key aspects about BharOS

  1. BharOS is actually developed from the source code of Google's Android Operating System Package (AOSP). But, it does not come pre-loaded with apps, thus freeing more space in the phone and consumers can install apps that they really want to use, which is not the case with the Android and iOS platform

  2. BharOS software can be side-loaded to most of the Android phones available in the market, and for obvious reasons, it cannot be installed on Apple iPhones

  3. BharOS can run most Android apps, but cannot run iOS apps. Users can side-load any APKs (Android  Package Kits) of Android apps.

  4. BharOS offers more control to users over the permissions that apps have on the device. He/she can choose to only allow apps that they trust to access certain features or data on their device.

  5. JandKops developers claim that phones with BharOS can be updated to the new version with the latest security patch via Over-The-Air, like any other smartphones in the market

  6. Unlike Google Play Store (for Android) and Apple App Store (for iOS devices), BharOS-based Phone users can access trust-worthy apps from organization-specific Private App Store Services (PASS). The latter offers access to a curated list of apps that have been thoroughly vetted and have met certain security and privacy standards of organisations.

  7. For now BharOS is not available to the public just yet. As noted above, private organisations, which emphasise security and user privacy for communication purpose, can approach JandKops to get access to BharOS

  8. JandKops is incubated by IIT Madras Pravartak Technologies Foundation. It is backed by the Department of Science and Technology (DST), Government of India, under its National Mission on Interdisciplinary Cyber-Physical Systems (NMICPS).

Fall Short Of Targets to Improve Forest Cover

GS Paper - 3 (Environment and Ecology)

Centre had approved a target of increasing tree cover by 53,377 hectares but only 26,287 ha has been achieved. The forest quality improved by only 1,02,096 ha against target of 1,66,656 ha. India is lagging behind in the targets to increase the number and quality of tree- and forest-cover plantations set in the Green India Mission.

Green IndiaMission

  1. National Mission for a Green India (GIM) is one of the eight Missions under the National Action Plan on Climate Change.

  2. It aims at protecting, restoring and enhancing India’s forest cover and responding to climate change.

  3. The target under the Mission is 10 million hectares (Mha) on forest and non-forest lands for increasing the forest/tree cover and to improve the quality of existing forest.

  4. Improving tree cover is critical to sequester carbon and bolster India’s carbon stocks as part of its international commitments to mitigate greenhouse gas emissions.

Forest Report 2021

  1. Forest and tree cover in the country increased by 2,261 square kilometers since the last assessment in 2019.

  2. India’s total forest and tree cover was 80.9 million hectares, which accounted for 24.62% of the geographical area of the country.

  3. The report said 17 States and Union Territories had more than 33% of their area under forest cover.

  4. Madhya Pradesh had the largest forest cover, followed by Arunachal PradeshChhattisgarh, Odisha and Maharashtra.

  5. The top five States in terms of forest cover as a percentage of their total geographical area were Mizoram (84.53%), Arunachal Pradesh (79.33%), Meghalaya (76%), Manipur (74.34%) and Nagaland (73.90%).


Egypt’s President Visit and its ties with India

GS Paper -2 (International Relations)

Egypt’s President Abdel Fattah El-Sisi, the chief guest for the Republic Day celebrations this year. This is the first time that an Egyptian President has been invited as chief guest for the event.

More about the news:

Significance of a Republic Day invites:

ü  An invitation to be the Republic Day chief guest is highly symbolic from the Indian government’s perspective.

ü  The choice of chief guest every year is dictated by a number of reasons — strategic and diplomatic, business interests, and international geo-politics.

History of India-Egypt relations:

  • India and Egypt share close political understanding based on a long history of cooperation in bilateral, regional and global issues.

  • The joint announcement of the establishment of diplomatic relations at the Ambassadorial level was made on August 18, 1947.

  • India’s first Prime Minister Jawaharlal Nehru and Egypt’s President Gamal Abdel Nasser signed the Friendship Treaty between the two countries, and they were vital to forming the Non-Aligned Movement (NAM) along with Yugoslav President Josip Broz Tito.

  • Since the 1980s, there have been four Prime Ministerial visits from India to Egypt: Rajiv Gandhi (1985); P V Narasimha Rao (1995); IK Gujral (1997); and Dr. Manmohan Singh (2009, NAM Summit).

  • From the Egyptian side, President Hosni Mubarak visited India in 1982, in 1983 (NAM Summit), and again in 2008.

  • President Sisi also paid a State visit to India in September 2016. A joint statement was issued, outlining the three pillars of political-security cooperation, economic engagement & scientific collaboration and cultural & people-people ties as the basis of a new partnership for a new era.

State of bilateral trade relations:

  •   The India-Egypt bilateral trade agreement has been in operation since March 1978 and is based on the most-favoured nation clause.

  •   Bilateral trade has expanded rapidly in 21-22 — climbing to 7.26 billion, a 75 per cent increase from FY 2020-2021.

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