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Daily Current AFfairs 23.07.2021 (Glucagon can impact Type-2 diabetes: study, Survey gives insights into birth and death of stars, RBI plans digital currency pilots soon)

Daily Current AFfairs 23.07.2021 (Glucagon can impact Type-2 diabetes: study, Survey gives insights into birth and death of stars, RBI plans digital currency pilots soon)

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1.Glucagon can impact Type-2 diabetes: study

‘The new finding may change the way diabetes is treated’

A recent study has found that glucagon, one of the two hormones produced by the pancreas, plays an important role in the development of Type 2 diabetes.

In the study done on a group of 81 persons in a tertiary care centre for diabetes in Chennai between September and November 2019, candidates aged over 25 of both sexes and without a history of diabetes were selected. The study titled, “Hyperglucagonemia and impaired insulin sensitivity are associated with development of prediabetes and type 2 diabetes — A study from South India”, was published in the peer-reviewed journal Diabetes & Metabolic Syndrome: Clinical Research & Reviews.

Influence of glucagon

The aim was to assess the influence of glucagon in persons with normal glucose tolerance, pre-diabetics and newly diagnosed diabetes. “The pancreas has alpha cells and beta cells. Alpha cells produce glucagon and beta cells, insulin. This is for the first time in India glucagon level has been studied. So far, we were thinking insulin is the main culprit but here we have shown that glucagon levels are elevated especially in pre-diabetics and early, newly diagnosed diabetics. We found that glucagon level is high especially in the newly diagnosed and pre-diabetic people,” Vijay Viswanathan, chief diabetologist, M.V. Hospital for Diabetes, said.

The findings could change how diabetes is treated as till now it was believed to be caused due to the impaired capability of beta cells that produce insulin.

Although in the west glucagon is included, across the world data on glucagon was low, he said.

“This has a lot of implications for treatment. Usually people are treated with metformin but this finding is going to change that. People will have to talk about reduction of glucagon levels from the beginning,” Dr. Vijay said.

Satyavani Kumpatla, lead researcher, said the kit to measure glucagon had to be imported from Sweden as it was not even measured in India. “There was limited data on glucagon levels. From this study, we conclude that hyperglucagonemia may contribute to development of type 2 diabetes. The levels of glucagon was higher in pre-diabetes and newly diagnosed diabetics than normal subjects. All the three groups had elevated fasting glucagon levels,” she said.

Dr. Vijay said the study indicated that diabetologists should urge people to do aerobic and muscle strengthening exercises. “Women should build muscle mass to improve insulin sensitivity. Resistance training is need to improve insulin sensitivity,” he said.

Diabetes

Diabetes is a condition that impairs the body’s ability to process blood glucose, otherwise known as blood sugar.

  • Types
    • Type I diabetes: Also known as juvenile diabetes, this type occurs when the body fails to produce insulin. People with type I diabetes are insulin-dependent, which means they must take artificial insulin daily to stay alive.
    • Type 2 diabetes: It affects the way the body uses insulin. While the body still makes insulin, unlike in type I, the cells in the body do not respond to it as effectively as they once did.
      • This is the most common type of diabetes and it has strong links with obesity.
    • Gestational diabetes: This type occurs in women during pregnancy when the body can become less sensitive to insulin. Gestational diabetes does not occur in all women and usually resolves after giving birth.

2.Survey gives insights into birth and death of stars

Scientists from IIST, IISc part of Milky Way study

How are stars born and how do they die? It’s a question that has fascinated scientists for centuries.

An extensive survey of the Milky Way galaxy by an international team of astronomers, including scientists from the Indian Institute of Science (IISc), Bengaluru, and the Indian Institute of Space Science and Technology (IIST), Thiruvananthapuram, has offered fresh insights into this immensely complex and mind-boggling process.

The GLOSTAR (Global View on Star Formation in the Milky Way) project has reported new findings, including the identification of 80 supernova remnant (SNR) candidates, the IIST said on Thursday. Supernova remnants are cosmic structures born out of the violent, explosive death of massive stars. The GLOSTAR team has now published a series of papers on its findings in Astronomy & Astrophysics.

The survey has “revealed previously unseen signatures with unprecedented sensitivity and details that hint at how stars form and die,” the IIST said.

Indian scientists who are part of the GLOSTAR Survey include Nirupam Roy, assistant professor at the Department of Physics, IISc; Rohit Dokara, a former undergraduate student at IISc; and Jagadheep D. Pandian, associate professor at the Department of Earth and Space Sciences at IIST, Thiruvananthapuram.

The data for the survey, which spanned a large swathe of the Milky Way, was gathered using two powerful radio telescopes — the Karl G. Jansky Very Large Array (VLA) at the National Radio Astronomy Observatory (NRAO), U.S., and the Effelsberg 100-m radio telescope operated by the Max Planck Institute for Radio Astronomy (MPIfR), Germany.

The supernova remnants were spotted using the VLA data alone, and analysis of the combined data from both the radio telescopes is likely to throw up more. Previous surveys have detected only about one-third of the expected numbers of SNRs in the Milky Way galaxy. “This is an important step to solve the long-standing mystery of the missing supernova remnants,” Mr. Dokara was quoted in the IIST statement.

Researchers also detected other traces of star formation such as radio emission from methanol molecules in Cygnus X. These are typically emitted by massive stars in the very early stages of their formation. The team was also able to detect dense pockets of ionised hydrogen, another telltale sign of the presence of massive young stars. Young stars are usually surrounded by thick clouds of dust and gas.

Other team members include MPIfR and NRAO scientists, and collaborators from institutions in the U.K., South Africa, Mexico, France and Australia.

3.Limits of cooperation

Reforms in cooperative sector should not be at the cost of federal principles

The cooperative movement certainly needs reform and revitalisation. Beset by political interference, many cooperative societies do not hold elections regularly, while some are superseded frequently. The 97th Constitution Amendment, which came into effect in 2012, was a major step towards infusing autonomy, democratic functioning and professional management. The recent Supreme Court verdict holding the amendment unconstitutional to the extent it applied to cooperative societies under the control of the States is a reminder that even well-intentioned efforts towards reforms cannot be at the cost of the quasi-federal principles underlying the Constitution. The amendment added Part IXB to the Constitution, concerning cooperative societies. Part IXB delineated the contours of what State legislation on cooperative societies ought to contain, including provisions on the maximum number of directors in each society, reservation for seats for SCs, or STs, and women, besides the duration of the terms of elected members, among others. The question before the Court was whether the 97th Amendment impacted the legislative domain of the State Legislatures and, therefore, required ratification by half the legislatures, in addition to the required two-thirds majority in Parliament. The Gujarat High Court had found the amendment invalid for want of such ratification. The Supreme Court, by a 2:1 majority, upheld the judgment holding the amendment invalid, but only in relation to cooperatives under the States. The elaborate amendment would hold good for multi-State cooperative societies, on which Parliament was competent to enact laws.

A significant limitation on Parliament’s amending power is the requirement that certain kinds of amendments to the Constitution must be ratified by 50% of the State legislatures. The Union government believed that as the subject of ‘cooperative societies’ in the State List was not altered in any way by the 97th Amendment, and that it only outlined guidelines on any law on cooperatives that the Assemblies may enact, the ratification was not necessary. A key principle from the judgment is that the ratification requirement will apply if there is any attempt to fetter the State legislatures in any way while enacting a law in their own domain, even if there is no attempt to alter the distribution of legislative powers between the Union and States. Thus, in the absence of ratification by the States, the amendment that sought to prescribe the outlines of State laws on a State subject did not pass constitutional muster. The judgment may mean that the concern expressed by some about the adverse implications of the formation of a new Ministry of Cooperation on federal principles could be true. However, there is no denying that the scope for democratising the functioning of cooperative societies and enhancing their autonomy remains unchanged.

The Constitution (Ninety Seventh Amendment) Act 2011 relating to the co-operatives is aimed to encourage economic activities of cooperatives which in turn help progress of rural India. It is expected to not only ensure autonomous and democratic functioning of cooperatives, but also the accountability of the management to the members and other stakeholders. As per the amendment the changes done to constitution are:-

  •  In Part III of the constitution, after words “or unions” the words “Cooperative Societies” was added.
  • In Part IV a new Article 43B was inserted, which says: The state shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of the co-operative societies”.
  • After Part IXA of the constitution, a Part IXB was inserted to accommodate state vs centre roles.

Salient features Part IXB

  • It makes Right to form cooperatives is a fundamental right.
  • Reservation of one seat for SC/ST and two seats for women on the board of every co-operative society.
  • Cooperatives could set up agency which would oversee election.
  • Uniformity in the tenure of Cooperative Board of Directors.
  • Provisions for incorporation, regulation and winding up of co-operative societies based on the principles of democratic process and specifying the maximum number of directors as twenty-one.
  • Providing for a fixed term of five years from the date of election in respect of the elected members of the board and its office bearers;
  • Providing for a maximum time limit of six months during which a board of directors of co-operative society could be kept under suspension;
  • Providing for independent professional audit;
  • Providing for right of information to the members of the co-operative societies;
  • Empowering the State Governments to obtain periodic reports of activities and accounts of co-operative societies; which have individuals as members from such categories;
  • Providing for offences relating to co-operative societies and penalties in respect of such offences.

Implications

  • The amendment of the Constitution to make it obligatory for the states to ensure autonomy of cooperatives makes it binding for the state governments to facilitate voluntary formation, independent decision-making and democratic control and functioning of the cooperatives.
  • It also ensures holding regular elections under the supervision of autonomous authorities, five-year term for functionaries and independent audit. Significantly, it also mandates that in case the board is dissolved, the new one is constituted within six months. Such a constitutional provision was urgently required as the woes of the cooperative sector are far too many, long-lasting and deep-rooted to be addressed under the present lax legal framework
  • However, it fails to establish what constitutional amendments can’t do in reviving institutions and may be victim of rival political institutions at the state level as happened in case of 73rd amendments. It is feared that state-level politicians will do to this amendment on cooperatives what they did to the one on panchayats. Barring exceptions in a few sectors and states, the cooperative sector, particularly cooperative credit societies numbering over 120 million, has for a long time been in a shambles with all kinds of vested interests using them as personal fiefdoms and ladders to political power and means of personal aggrandisement.

4.RBI plans digital currency pilots soon

CBDC will help cut the cost of currency management while expediting real-time payments

The Reserve Bank of India is likely to soon kick off pilot projects to assess the viability of using digital currency to make wholesale and retail payments to help calibrate its strategy for introducing a full-scale central bank digital currency (CBDC).

“Every idea has to wait for its time, perhaps the time for a CBDC is here,” RBI Deputy Governor T. Rabi Sankar said on Thursday. “Like other central banks, we have also been exploring the pros and cons of this since quite some time,” he added.

India is already a leader in digital payments, but cash remains dominant for small-value transactions, he said, stressing that an official digital currency would reduce the cost of currency management while enabling real-time payments without any inter-bank settlement.

“Some key issues are being examined: whether they should be used in retail or wholesale payments, the underlying technology, if the validation mechanism should be token-based, etc. Conducting pilots in wholesale and retail segments may be a possibility in the near future,” he said.

A high-level inter-ministerial committee set up by the Finance Ministry had recommended the introduction of a CBDC with changes in the legal framework including the RBI Act, which currently empowers the RBI to regulate issuance of bank notes.

‘Save on paper currency’

“India’s fairly high currency-to-GDP ratio holds out another benefit of CBDC — to the extent large cash usage can be replaced by CBDC, the cost of printing, transporting and storing paper currency can be substantially reduced,” Mr. Sankar said at a discussion hosted by Vidhi Centre for Legal Policy.

“The advent of private virtual currencies is another reason… If these private currencies gain recognition, national currencies with limited convertibility are likely to come under some kind of threat,” he remarked.

Transacting with CBDC would be an instantaneous process as the need for inter-bank settlement would disappear as it would be a central bank liability handed over from one person to another, Mr. Sankar pointed out. Moreover, foreign trade transactions could be speeded up between countries adopting a CBDC.

“They could enable a cheaper and more real-time globalisation of payment systems — it is conceivable for an Indian exporter to be paid on a real-time basis without any intermediary…The risks of dollar-rupee transactions, the time zone difference in such transactions would virtually disappear,” he added.

This article is based on “Encrypting the rupee” which was published in The Hindu Business line on 01/12/2020. It talks about the prospects of a Central Bank issued Digital Currency in India.

The growing popularity of digital currencies (or cryptocurrency) such as Bitcoin, over the last decade, had made most central banks look seriously at launching a digital currency controlled by them that can address the shortcomings of digital currencies while hastening the shift towards a cashless society.

In this context, the European Central Bank has expressed its intention to evaluate a Central Bank issued Digital Currency (CBDC) for the Euro Zone. The RBI had, in 2018, directed financial institutions against facilitating transactions involving cryptocurrencies, leading to many crypto trading platforms shutting down.

However, recently RBI has indicated that it is conducting a feasibility study of developing a government-backed digital currency. As many countries today explore the prospects of a sovereign digital currency, India should not lag behind in developing Digital Rupee.

Note: Digitalisation of Fiat Currency From Digital Currency.

  • In order to understand the importance of a Digital Rupee, it is required to distinguish the digitalisation of fiat currency from digital currency.
  • The digitisation of fiat currency stems from the advent of electronic payment and interbank IT systems, allowing commercial banks to more efficiently and independently generate the credit flows that expand the broad money supply.
  • By contrast, digital currency, enabled by blockchain technology, affects the base currency allowing the central bank to bypass commercial banks and regain control of currency creation and supply end-to-end.

Need For CBDC in India

  • Addressing the Malpractices: The need for a sovereign digital currency arises from the anarchic design of existing cryptocurrencies, wherein their creation, as well as maintenance, are in the hands of the public.
    • With no government supervision and ease of cross-border payments, renders them vulnerable to malpractices like tax evasion, terror funding, money laundering, etc.
    • By regulating digital currency, the central bank can put a check on their malpractices.
  • Addressing Volatility: As the cryptocurrencies are not pegged to any asset or currency, its value is solely determined by speculation (demand and supply). It is due to this, there has been huge volatility in the value of cryptocurrencies like bitcoin.
    • As CBDCs will be pegged to any assets (like gold or fiat currency) and hence will not witness the volatility being seen in cryptocurrencies.
  • Next Big Thing: In a survey conducted by Bank for International Settlements, around 80 per cent of the 66 responding central banks said they have begun working on central bank-issued digital currency (CBDC) in some form.
    • Moreover, China is quietly bringing about a revolutionary change to the currency and payment system by launching its Digital Renminbi.
  • Digital Currency Proxy War: India runs the risk of being caught up in the whirlwind of a proxy digital currency war as the US and China battle it out to gain supremacy across other markets by introducing new-age financial products.
    • Today, a sovereign Digital Rupee isn’t just a matter of financial innovation but a need to push back against the inevitable proxy war which threatens our national and financial security.
  • Reducing Dependency on Dollar: Digital Rupee provides an opportunity for India to establish the dominance of Digital Rupee as a superior currency for trade with its strategic partners, thereby reducing dependency on the dollar.

Digital Proxy War

  • For too long, the dollar has been unchallenged as the world’s reserve currency giving the US leverage over the world’s financial system and also enabling it to impose sanctions against countries.
  • However, in wake of the recent trade war, China is now pushing for a more advanced financial system using Digital Renminbi.

Advantages of Digital Rupee

  • Complete Transmission of Monetary Policy: Digital Rupee will empower the RBI by providing it direct tools to control monetary policy.
    • Directly influenced creation and supply flow using a Digital Rupee will immediately reflect the effects of policy changes instead of relying on commercial banks to make those changes when they deem fit.
  • Safeguarding the Interest of Deposit Holders: The recent NBFC crisis resulting in the current downturn in the economy and the PMC Bank scandal which has locked out depositors from withdrawing their funds due to high NPAs are a testament to the fragility of our current banking model.
    • Officially backed Digital Rupee will empower the regulators to monitor transactions and credit flow across the economy helping them weed out scams and fraud instantly and secure depositors’ money.
    • Moreover, it will help distract investors from the current bunch of crypto assets that are highly risky.
  • New Paradigm For Banking: Digital Rupee will turn every large technology company into a fintech company without the need for permission or partnership with a bank.
    • This will create new incentives for companies to bank the unbanked, while also providing financial services to those who have been at the mercy of banks till date.
  • Enabler of Cashless Society: Official digital currencies can play an important role in weaning users away from using cash, which will help control tax evasion.
    • Digital Rupee will also make cashback, remittances, loans, insurance, stocks and other financial products a natural extension using programmable smart contracts.

Conclusion

The creation of a Digital Rupee will provide an opportunity for India to empower its citizens and enable them to use it freely in our ever-expanding digital economy and break free from an outdated banking system. Looking into its impact on macroeconomy and liquidity, banking systems and money markets, it is imperative of policymakers to thoroughly consider the prospects of Digital Rupee in India.

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