Financial Consumer Protection (FCP)

In Context

  • Recently, the OECD released a draft of the proposed revisions to their 2011 High-level Principles on Financial Consumer Protection (FCP).

More about the news

  • OECD’s principles:
    • The OECD is working on how to enhance financial consumer protection, which includes determining what is required to help consumers gain the confidence, knowledge, information, security and choices they need to enable them to fully participate in financial markets.
    • OECD’s principles deal with three cross-cutting themes — financial well-being, digitalisation and sustainable finance. 
  • OECD’s 2011 principles on FCP covered 10 thematic areas reflecting the
    • Market and consumer issues, 
    • Equitable and fair consumer treatment, 
    • Disclosures and transparency, and 
    • Financial education. 
  • In 2022, two additional principles were included:
    • Access and inclusion and 
    • Quality financial products.
    • The updated principles also recommend
      • Intervention by regulators in certain high risk products, 
      • Cultivating appropriate firm culture and 
      • Using behavioural insights to better consumer outcomes.
About the Financial MarketAbout:The Financial Market is a place where financial products and services are bought and sold on a regular basis.It deals in the purchase and sale of different types of investments, financial services, loans, etc.Financial markets in India:There are two main types of financial markets in India where the majority of trading is happening. The first one is the money market and the second one is the capital market.Banks and financial institutions are a part of the financial market.Financial Consumer Protection (FCP):Financial Consumer Protection (FCP) includes determining what is required to help consumers gain the confidence, knowledge, information, security and choices they need to enable them to fully participate in financial markets.Need of FCP:The RBI’s financial inclusion index shows that an increasing number of people are entering financial markets. FCP is central to ensuring that they continue to stay.

Significance of effective Financial Consumer Protection (FCP) in India

  • Disclosures and transparency:
    • About:
      • An effective FCP regime must ensure adequate and easy to understand disclosures to consumers. 
    • For India:
      • However, an information dump for mere compliance defeats this purpose, especially in India where financial literacy is not pervasive
    • SEBI’s guidelines:
      • Therefore, regulators such as SEBI prescribe certain financial service providers to assess customer suitability and undertake risk profiling before providing services. 
    • Global practice:
      • Countries such as the UK and New Zealand have introduced guidance to identify and provide fair treatment to “vulnerable financial consumers”. 
      • At present, India does not recognise this concept. 
  • Newer areas for intervention:
    • About:
      • FCP must consider the increasing number of digital channels consumers use to interact with financial products and services 
      • It should also consider the impact of greater use of artificial intelligence and other emerging technologies
    • For India:
      • With the rising number of UPI transactions and the largely unregulated status of cryptocurrencies, FCP will continue to be relevant.
    • RBI guidelines:
      • RBI released guidelines on digital lending, mandating entities providing digital lending services to have a grievance redress officer, assess a borrower’s creditworthiness before extending credit, and allow a borrower to exit without penalty. 
  • Sustainability of financial investments:
    • About:
      • There is growing consumer demand for sustainable financial investments. 
      • Financial services providers are incorporating environmental, social and governance factors into their operations, products and services. 
      • FCP recommends improved transparency to help consumers make informed choices.
    • SEBI’s BRSR:
      • SEBI has transitioned from “business responsibility reporting” to “business responsibility and sustainability reporting” (BRSR) to promote responsible corporate governance vis-a-vis climate change.
        • Eligible companies under BRSR must provide ESG related disclosures, including a sustainability performance report. 
        • This allows investors to make an informed decision. 
      • Similar disclosures must be introduced in other market segments.
  • Greenwashing:
    • The 2022 draft also warns against “greenwashing”.
      • This is aligned with an expert report presented at COP27. 
    • Financial regulators must monitor that Indian corporations are not misleading consumers with false claims regarding progress towards climate targets.

Way Ahead

  • The current regulatory landscape is sectoral and fragmented, resulting in regulatory arbitrage, as witnessed in the case of digital gold. 
  • Regulators must take a coordinated approach to protect consumers.
Organisation for Economic Co-operation and Development (OECD)Foundation:The forerunner of the OECD was the Organisation for European Economic Co-operation (OEEC), which was formed to administer American and Canadian aid under the Marshall Plan for the reconstruction of Europe after World War II.The Convention transforming the OEEC into the OECD was signed at the Chateau de la Muette in Paris on 14 December 1960 and entered into force on 30 September 1961.About:It is a forum and its members are countries which describe themselves as committed to democracy and the market economy, providing a platform to compare policy experiences, seek answers to common problems, identify good practices and coordinate domestic and international policies of its members.Economies:The majority of OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries. Secretary-General:The head of the OECD Secretariat and chair of the OECD Council is the Secretary-General.Secretary-General selections are made by consensus, meaning all member states must agree on a candidate.HQ: Paris, FranceMembers:OECD has 38 member countries.India:India is not a member of OECD. Although, India is one of those non-member economies with which the OECD has working relationships in addition to its member countries. Securities and Exchange Board of India (SEBI):About:SEBI is a statutory body established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.Aim: To protect the interests of investors in securities and to promote the development of, and regulate the securities market.It is the regulator of the securities and commodity market in India owned by the Government of India.

India-Russia Bilateral Coordination at UN

In News

  • India and Russia recently agreed to “deepen cooperation” on counter-terrorism issues and enhance bilateral coordination at the United Nations.

More about the UN consultation between India and Russia

  • About:
    • It is the third such UN consultation between India and Russia in the past year.
    • Background:
      • Recently India abstained from yet another vote at the UN General Assembly that called for reparations to be paid by Russia for the war in Ukraine.
      • Apart from a few procedural votes, India has refused to support any vote at the UN Security Council, UN General Assembly and other UN agencies that have criticised Russia since the Russian President first ordered strikes on Ukraine.
    • Significance of this bilateral consultation:
      • The bilateral consultations reaffirmed mutual commitment to further strengthen bilateral coordination and constructive cooperation at the UN platform on the basis of its Charter 
      • It is also in line with the special and privileged strategic partnership between Moscow and New Delhi.
  • Other issues of discussion:
    • On UNSC:
      • Both sides held wide-ranging discussions on issues on the UN Security Council agenda and recent developments. 
      • The two sides also discussed India’s presidency of the UNSC in December 2022, which will be India’s last month in the UNSC, as its two-year elected tenure comes to an end
    • On India’s concerns on UN peacekeeping:
      • During the talks, “special attention” was also paid to the problems of UN peacekeeping.
        • It is an area where India has frequently raised concerns at the UN, especially after the deaths of Indian personnel in 2022.
    • Global issues:
      • Both countries also discussed the situation in Ukraine, Afghanistan, Syria, Myanmar, and the conflict on the Armenia-Azerbaijan border.

India-Russia Relations

  • India and Russia have a history of strong strategic, military, economic, and diplomatic relationships.
  • Political Relations:
    • The Annual Summit meeting between the Prime Minister of India and the President of the Russian Federation is the highest institutionalized dialogue mechanism in the strategic partnership between India and Russia. 
    • So far 20 Annual Summit meetings have taken place alternatively in India and Russia. 
  • Intergovernmental Commissions:
    • There is regular high-level interaction between the two countries.
    • The IRIGC (India-Russia Intergovernmental Commission):
      • It is the main body that conducts affairs at the governmental level between both countries. Both countries are members of international bodies including the UN, BRICS, G20 and SCO.
    • Two Inter-Governmental Commissions:
      • One on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC), co-chaired by EAM and the Russian DPM, and 
      • Another on Military-Technical Cooperation (IRIGC- MTC) co-chaired by Russian and Indian Defence Ministers, meet annually.
  • Trade and Economic Relations:
    • Both sides revised targets of increasing bilateral investment to US $50 billion and bilateral trade to US $30 billion by 2025.
      • India’s merchandise imports from Russia include petroleum oil and other fuel items, fertilizers, coffee and tea, spices, nuclear reactors, and animal and vegetable fats, among others.
  • Nuclear Energy:
    • Russia recognizes India as a country with advanced nuclear technology with an impeccable non-proliferation record. 
    • Kudankulam Nuclear Power Plant (KKNPP) is being built in India with Russian cooperation. 
  • Space Cooperation:
    • Both sides cooperate in the peaceful uses of outer space, including satellite launches, GLONASS navigation system, remote sensing and other societal applications of outer space.
  • Science & Technology:
    • The Working Group on Science and Technology functioning under IRIGC-TEC, the Integrated Long Term Programme (ILTP) and the Basic Science Cooperation Programme are the three main institutional mechanisms for bilateral Science and Technology cooperation.
  • Cultural Cooperation:
    • There is a strong tradition of Indian studies in Russia. 
    • There is strong interest among Russian people in Indian dance, music, yoga and Ayurveda.
  • Defence and Security Cooperation:
    • India has longstanding and wide-ranging cooperation with Russia in the field of defence. 
    • BrahMos Missile System as well as the licensed production in India of SU-30 aircraft and T-90 tanks are examples of such flagship cooperation.
    • Both sides concluded agreements on the supply of S-400 air defence systems, construction of frigates under Project 1135.6 and shareholders agreement on the formation of a joint venture to manufacture Ka-226T helicopters in India.
    • The two countries also hold exchanges and training exercises between their armed forces annually termed INDRA.
India’s Stand on Russia’s War with Ukraine & way aheadIndia’s response to the Russian invasion of Ukraine has been distinctive among the major democracies and among U.S. strategic partners. Despite its discomfort with Moscow’s war, New Delhi has adopted studied public neutrality toward Russia. It has abstained from successive votes in the UN Security Council, General Assembly, and Human Rights Council that condemned Russian aggression in Ukraine and thus far has refused to openly call out Russia as the instigator of the crisis. India has been under immense indirect pressure from Western nations that have openly condemned Russia’s military aggression against Ukraine. India has been pressing for the resolution of the crisis through diplomacy and dialogue.

Regulatory Framework for Promoting Data Economy

In News

  • Recently, the Telecom Regulatory Authority of India (TRAI) released its recommendations on ‘Regulatory Framework for Promoting Data Economy Through Establishment of Data Centres (DCs), Content Delivery Networks (CDNs), and Interconnect Exchanges (IXPs) in India’.


  • National Digital Communications Policy (NDCP) 2018 envisages “Evolving enabling regulatory frameworks and incentives for promoting the establishment of International Data Centres, Content Delivery Networks, and Independent Interconnect exchanges in India”.
  • Accordingly, the Authority suo-moto issued a detailed Consultation Paper (CP) on the subject.

Salient features of the Recommendations

  • Data Centres:
    • Authority has recommended bringing out the Data Centre Incentivization Scheme (DCIS) for establishing Data Centres (DCs) and Data Centre Parks (Dc Parks). DCIS to have two list of incentives –
      • Certain Centre specific fiscal and non-fiscal incentives can be rolled out by the Central Government.
      • The other in the form of a guideline to the States; leaving flexibility to States to announce fiscal incentives through their policies.
    • Operationalizing a Data Centre specific portal on National Single Window System (NSWS) for –
      • Time-bound single window clearances with provision for deemed approval after elapse of prescribed timelines for non-critical category permissions
      • Mandatory online registration of new DCs/DC Park operators without any obligation or registration fees. This will be purely for statistical and record purposes.
      • Issue of notifications, announcement of schemes & benefits, facility to interact and respond to queries of potential investors, and grievance redressal of existing and prospective DC/DC Park operators.
  • national level DC Readiness Index (DCRI) framework to be implemented by the Central Government to rank Indian states as per their suitability to promote the DC sector. An indicative list of parameters and their weightages for ranking the States has been suggested.
  • Establish DC Economic Zones (DCEZs) – Out of suggested list of 33 SEZs which are located in areas with abandon power and water, one SEZ can be identified each in State of Andhra Pradesh, Kerala, Karnataka, Maharashtra, Haryana, UP, MP, Gujarat, Rajasthan, and Odisha, for either converting them into DCEZs or for carving out zones out of these SEZs for establishing DCs/DC parks.
  • Promoting Green DCs:
    • Indian Green Building Council (IGBC) along with Telecommunication Engineering Centre (TEC) should be entrusted with the task of framing certification standards of green DCs in India.
    • Government should form a scheme to invite Requests for Proposal (RFP) on an experimental basis for new technology/methods/processes that can be adopted for promoting green DCs.
  • Capacity Building:
    • National Telecom Institute for Policy Research & Training (NTIPRIT) under Department of Telecommunication (DoT), MeitY, All India Council for technical Education (AICTE) and Telecom Sector Skill Council (TSSC) should closely collaborate with DC industry to develop tailor-made short and long-term courses.
  • Content Delivery Networks (CDNs)
    • CDNs play an important role in the value chain of content delivery ecosystem. 
    • The internet traffic, which was earlier being delivered by ISPs alone, is now being delivered by ISP and CDN combined. 
    • ISPs perform load balancing, traffic engineering and offers guaranteed quality of service to end users. 
    • CDN Players also leverage various techniques like load balancing, caching, optimization, use of security protocols, etc. for ensuring better delivery of content to end users in association with TSPs. 
    • CDN players are major contributors to the network traffic and can affect the overall quality of service. 
    • Accordingly, TRAI, in its consultation process, had discussed various CDN-ISP interconnection and collaboration related policy and regulatory concerns.
      • To address these issues, TRAI has recommended that CDN players should be registered with DoT through a simple online registration process. The suggestive draft for guidelines for registration of CDN players along with registration form and registration certificate has been recommended with a one time registration fee of Rs 10,000.
      • The incentives recommended for DCs should also help in proliferation of CDNs in the country and this would in turn provide a boost to the digital infrastructure ecosystem, including CDNs and IXPs.
  • Interconnect Exchanges Providers (IXPs):
    • Currently, IXPs are required to obtain Internet Service Providers (ISPs) license which has several onerous licensing conditions related to subscriber verification, security etc which are not relevant to them. 
    • This creates artificial entry barriers. 
    • To address this issue and promote setting up of more IXPs, especially in Tier-II and Tier-III cities, TRAI has recommended that a separate authorization in Unified License may be created for IXPs with terms and conditions that are much less onerous than ISP license authorization.

Addressing Demand Side Issues of Digital Data Infrastructure

  • Data digitization, sharing and monetization – A statutory body Data Digitization and Monetization Council (DDMC) for steering the data digitization drive be prescribed at the Centre,
  • Data Ownership – Government should put in place a data sharing and consent management framework on lines of DEPA framework to provide telecom subscribers consent based option to share their KYC data with recipient TSP when they port their numbers.
  • Data Ethics – DDMC should also be entrusted with the responsibility of putting in place an overarching framework for ethical use of data both by Government as well as by corporate in India. The framework should address the generic as well as vertical sector specific requirements.

Data Economy

  • The data economy is the global digital ecosystem in which the producers and consumers of data—businesses and individuals—and government and municipal agencies gather, organize, and share accumulated data from a wide variety of sources. 
  • By connecting unconnected data across industry boundaries, organizations can glean richer business insights, tap into unexplored markets, serve citizens and consumers alike with data-driven products and services, and monetize their data by sharing it externally with key customers and suppliers. 
  • Benefits:
    • More than half (53%) of business leaders say that participating in the data economy has led them to create new business models.
    • Another benefit of the data economy is faster innovation. Traditional companies are facing unprecedented pressure from their digitally native counterparts to innovate and respond quickly to evolving customer preferences and market trends.
    • Participating in a data economy can improve rates of customer acquisition and retention—gaining new customers and retaining current ones—while 42% of respondents cite increased revenue as an important business benefit. 

Way Ahead

  • The Central Government should prepare guidelines listing out the incentives for the Data Centres and DC Parks for the states that have scanty DC footprints, in line with other advanced states. 
  • Bureau of Indian Standards (BIS) should be entrusted for developing different India-specific building standards for construction of DCs and to develop India specific standard-based certification framework for the DCs.

National Bio Energy Programme

In News

  • Recently, the Ministry of New and Renewable Energy organized a seminar on the National Bio Energy Programme in New Delhi in partnership with UNIDO and GEF as part of Azadi Ka Amrit Mahotsav.


  • Biomass is simply organic matter: that means it comes from anything that’s alive or been alive, including animal waste, crop waste, garden waste and so on. 
  • India is endowed with abundant renewable energy resources and their use should be encouraged in every possible way. 
  • Rural India generates enormous quantities of bio-waste including animal waste, kitchen leftovers, crop residue, market waste and faecal sludge. 
  • Biogas is an environment friendly fuel and its utilization contributes to reduction of carbon emissions and pollution.

Major highlights of the seminar

  • They unveiled the compendium of the National Bio Energy Programme and launched the Biourja and Biogas portals.
    • BioUrja portal has been developed as a single window platform to register and submit online applications for grant of Central Financial Assistance (CFA) to Waste to Energy projects, Biomass Briquette/Pellet manufacturing plants and Biomass (non-bagasse) based cogeneration projects.
    • Biogas portal provides an overview on biogas related information.
  • It described waste as a source of wealth and emphasized the concept of ‘kachre-se-kanchan’.

About National Bioenergy Programme

  • The Ministry of New and Renewable Energy has notified the National Bioenergy Programme in November 2022.
  • MNRE has continued the National Bioenergy Programme for the period from FY 2021-22 to 2025-26.
  • The Programme has been recommended for implementation in two Phases:
    • The Phase-I of the Programme has been approved with a budget outlay of Rs. 858 crores.

The National Bioenergy Programme will comprise the following sub-schemes:

  • Waste to Energy Programme
    • It is Programme on Energy from Urban, Industrial and Agricultural Wastes /Residues to support the setting up of large Biogas, BioCNG and Power plants.
    • Indian Renewable Energy Development Agency (IREDA) will be the implementing agency for the program. 
  • Biomass Programme
    • It is a Scheme to Support Manufacturing of Briquettes & Pellets and Promotion of Biomass (non-bagasse) based cogeneration in Industries to support setting up of pellets and briquettes for use in power generation and non-bagasse based power generation projects.
  • Biogas Programme
    • To support setting up of family and medium size Biogas in rural areas.

Advantages of Bioenergy

  • It helps in providing clean cooking through biogas.
  • Co-firing in thermal power plants by utilizing biomass pellets and briquettes and BioCNG for transport.
  • Setting up of biogas plants for clean cooking fuel, lighting, meeting thermal and small power needs of users which results in GHG reduction, improved sanitation, women empowerment and creation of rural employment.
  • Organic enriched Bio-manure: The digested slurry from biogas plants is a rich source of manure which shall benefit farmers in supplementing / reducing the use of chemical fertilizers.
  • It is carbon neutral: As a natural part of photosynthesis, biomass fuels only release the same amount of carbon into the atmosphere as was absorbed by plants in the course of their life cycle.
  • It reduces the overreliance of fossil fuels: Not only is there a limited supply of fossil fuels, but fossil fuels come with environmental baggage, including the release of large amounts of carbon dioxide into the atmosphere and the pollutants that result from removal, transportation and production.
  • Less expensive than fossil fuels: While fossil fuel production requires a heavy outlay of capital, such as oil drills, gas pipelines and fuel collection, biomass technology is much cheaper. Manufacturers and producers are able to generate higher profits from a lower output.

Disadvantages of Bioenergy

  • Biomass energy is not as efficient as fossil fuels: Some biofuels, like Ethanol, are relatively inefficient as compared to gasoline. In fact, it has to be fortified with fossil fuels to increase its efficiency.
  • It is not entirely clean: While biomass is carbon neutral, the use of animal and human waste escalates the amount of methane gases, which are also damaging to the environment. Additionally, the pollution created from burning wood and other natural materials can be considered just as bad as that resulting from burning coal and other types of energy resources.
  • Can lead to deforestation: Since wood is one of the most used sources of biomass energy, vast amounts of wood and other waste products have to be burned to produce the desired amount of power. While currently there is enough wood waste already, there is a risk of deforestation in the future.
  • Biomass construction plants don’t come cheap: The harvest, transportation and storage of organic matter can be costly and go beyond what other renewable sources need such as solar power. 
Government initiativeGOBAR-Dhan was launched by the Government of India in 2018 as a part of the Biodegradable Waste Management component under Swachh Bharat Mission (Grameen) (SMB-G) to positively impact village cleanliness and generate wealth and energy from cattle and organic waste.SATAT is an initiative aimed at providing a Sustainable Alternative towards Affordable Transportation as a developmental effort that would benefit both vehicle-users as well as farmers and entrepreneurs. This initiative holds great promise for efficient municipal solid waste management and in tackling the problem of polluted urban air due to farm stubble-burning and carbon emissions.

Way forward  

  • Rural household: The benefits of utilization of surplus biomass should reach the rural household by way of an additional source of income for farmers.
  • The extra push in the form of a 20 per cent higher standard CFA (central financial assistance) pattern for the north-eastern region and Gaushala/shelter was the need of the time to create inclusiveness in an applied manner.
  • Other benefits include:
    • Support to national commitments in achieving climate change goals
    • Reduction in import of natural gas and crude oil
    • Buffer against crude oil/gas price fluctuations.

New Doctrine for Indian Air Force (IAF)

In News

The Indian Air Force (IAF) needs a revised guiding document to help it navigate ahead smoothly.

Key Points

  • Need for Doctrinal Guidance: 
    • Presently it is debatable whether some breakthrough or efforts for indigenisation are being guided by some long-term institutionalised thinking and planning.
    • Because for longer and permanent effects, doctrinal guidance is required.
  • Guidance must include:
    • Ideas influenced by past experience, 
    • Present capability and 
    • Capacity of technological research and 
    • Development and manufacturing, 
    • Human resource availability and 
    • An organisational environment that encourages free thinking and 
    • A deliberation of fresh ideas. 
  • Need to change IAF’s Old doctrine: 
    • India’s intent to dominate conflict escalation is reflected in its 2012 airpower doctrine. 
    • It goes beyond outlining merely what airpower is, in terms of its roles, and explains to a far greater extent what airpower is for.
    • In contrast to the previous IAF doctrine, and, indeed, most Western airpower doctrine, the 2012 version makes a much clearer connection between airpower and national security
    • The IAF doctrine does not go as far as some previous British airpower doctrine, which suggests that control of the air is an end in itself.
    • It is time that the doctrine of the Indian Air Force (IAF) — it is of 2012 vintage — is reviewed and made public to guide the future development and application of India’s air power. 
  • Incorporate:
    • Technology has progressed exponentially. 
    • Artificial intelligence and machine learning are being refined to mimic human cognitive abilities and intuition. 
  • Roles and Functions in aspect of Space:
    • The roles and missions of the IAF would have to be re-assessed since space will be a major, if not a central, player in future conflicts. 
    • The weaponization of space must be accepted, the Outer Space Treaty notwithstanding. 

Learning from the USA

  • America’s nuclear asymmetry, post the Second World War was lost when the USSR was on a par. 
  • To counter this, the U.S. brought in the Revolution in Military Affairs, seen so vividly in the 1990-91 Gulf War. 
  • This turnaround took dedicated research teams under programmes that had continuity from 1965, and political backing under different Presidential administrations. 

Way Ahead for IAF

  • An inter-ministerial endeavour is needed, but this has to be institutionalised through a published doctrine.
  • With depleting fighter strength, Indian Air Force looks to speed up Su-30 fleet modernisation
  • New Doctrine should cater to:
    • The loss of air superiority has, and will, spell doom for a nation that chooses to neglect it; the IAF’s doctrine must expound on this aspect as an imperative despite the high financial commitment required.
    • For acceleration of fresh thought, personnel have to feel secure — they have to have the psychological high ground in order to be vocal with their ideas. The IAF’s new doctrine must accept this, even as it acknowledges that new technology would result in an information overload which actually accentuates stress in human resources.
    • A doctrinal alignment for expeditionary movements of raw materials must find a place in the document.
    • The IAF doctrine must underscore that ‘national defence’ is a national endeavour and should not be filtered through a prism of the political dispensation at the helm.
  • A call on how air power, with its niche strike, Airborne Intelligence, Surveillance and Reconnaissance (ISR) and precision attack capabilities would be merged in the drive towards jointness would be an imperative. 
  • Working on Theatrisation should not be slowed or stopped due to this.
  • With India trying to cement its place as a regional power of reckoning, these combat support assets are also vital for humanitarian assistance and disaster relief that are important cogs in military diplomacy and foreign policy.
    • Neglecting them would be to India’s disadvantage, more so because they are critical too in sustaining kinetic power. 


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