The Aakhya Weekly #36 | UPI in Singapore!
In Focus: UPI linked with Singapore’s PayNow
On February 21, India and Singapore linked their respective real-time payment systems, the Unified Payments Interface (UPI) and PayNow. This marks the launch of the first cross-border Person to Person (P2P) payment facilities in the world.
The Reserve Bank of India’s Governor, Shaktikanta Das, and the Monetary Authority of Singapore’s Managing Director, Ravi Menon, launched the UPI-PayNow linkage in the presence of Prime Minister Narendra Modi and Singapore’s Prime Minister, Lee Hsien Loong. Das and Menon demonstrated the linkage by making live “cross-border transactions” to each other using their mobile handsets.
The UPI-PayNow linkage is expected to facilitate faster, more efficient, and transparent cross-border transactions relating to trade, travel, and remittances between the two countries. A long and trusted partner of the Indian government, Singapore accounts for 5.7% of the total remittances to India, and Indian Singaporeans make up around 9% of the Singapore population.
This international link will enable users to make instant, low-cost fund transfers on a reciprocal basis without needing to get on the other payment system. Currently, the project is limited to a handful of Indian banks — State Bank of India, Indian Bank, Indian Overseas Bank, and ICICI Bank — that can enable transactions via their banking facilities or mobile apps. Third-party app providers such as PhonePe, Google Pay, or Paytm, which are not part of the launch, are soon expected to join the linkage. The maximum daily limit for transactions is set at $1,000 Singapore Dollars, and is expected to immediately benefit international students, labourers, and travellers between the two countries.
The UPI, introduced as a bank-to-bank pilot project in April 2016, has become the world’s fifth-largest payment network by volume by 2021, behind Visa, Alipay, WeChat Pay and Mastercard. The number of transactions via the UPI grew by 91% in 2022, with the value of transactions increasing by 75% to Rs. 126 trillion. It is expected that this move will pave the way for more countries to form such linkages with India’s UPI.
Financial inclusion has been a big push for the Indian government currently driving the G20 agenda through its presidency. Singapore, while not a G20 nation, has been invited to participate in the G20 Summits and its related processes from 2013 to 2023. This marks the first significant development for actualising this motive by showcasing India’s strength in the sector.
Top Stories of the Week
India joins the Agriculture Innovation Mission for Climate
India joins a global platform launched by the United States and United Arab Emirates to accelerate investment and support for innovation in climate-friendly agriculture and food systems.
On the sidelines of the India-Israel-UAE-US (I2U2) Business Forum - a group comprising India, Israel, the UAE and the US - the United States Under-Secretary of State, Jose W. Fernandez welcomed the Joint Secretary of the Indian Ministry of Foreign Affairs, Dammu Ravi signing a letter expressing the Government of India's willingness to join the Agriculture Innovation Mission for Climate (AIM4C). Launched by the United States and the United Arab Emirates in November 2021, the project aims to increase investment and support for innovation in climate-smart agriculture and food systems. To date, the AIM4C initiative has successfully grown such investments to over $8 billion worldwide. With this announcement, India joins more than 275 partners, including 42 governments, who are working together to advance the mission of the AIM4C.
During the I2U2 Sherpas’ meeting held in Abu Dhabi on 22nd February 2023, the Sherpas had reiterated their commitment to the I2U2 partnership and reviewed progress in all the existing and prospective projects. The I2U2 grouping was conceived at the four-nation Foreign Ministers' Meeting on October 18, 2021. Since then, each country has Sherpa-level interactions regularly to discuss possible areas of cooperation, predominantly aimed to encourage joint investments in six mutually identified areas – Water, Energy, Transportation, Space, Health and Food Security.
SEBI mulls ESG disclosures
SEBI has put out a consultation paper proposing a regulatory framework around environmental, social and governance (ESG) disclosures by major listed companies.
Over the last few years, investors have become increasingly interested in the broader societal and environmental impact of the investments they make. Companies are being pushed to make disclosures around the ESG impact of their businesses, and there is increased reliance on ESG ratings. This is also, however, an area rife with green-washing and misleading statements, creating the need for safeguards.
In view of this, SEBI is looking to expand the scope of the ‘Business Responsibility and Sustainability Report’ - a report that the top 1,000 listed companies must release every year - to add various ESG-related disclosures. Under the proposal, companies shall be required to set out various KPIs - in quantified, outcome-oriented terms - as part of the report. To strengthen and standardise ESG ratings, it has created ESG parameters attuned to the Indian context that may serve as minimum standards. It is also looking to mandate that such ratings are based on audited parameters, without taking statements made by companies on face value. Finally, it is also looking to create various protections around the functioning of ESG-centred mutual funds.
Comments on the proposal may be emailed to consultationcfd@sebi.gov.in by March 6, 2023.
This Week in Policy
Macroeconomics and Taxation
The first meeting of G20 finance ministers and central bank governors shall be held between February 24 and 25 in Bengaluru, on February 23 and 24. India is expected to focus on measures to promote macroeconomic stability and inclusive growth at the meet.
Labour
Since the NREGA is a demand-based scheme, the provision of funds for the scheme may be increased if demand increases, clarified Finance Minister Smt. Nirmala Sitharaman. The Union Budget 2023-24 had reduced allocation for the scheme, prompting much furore and commentary, which her comments seek to address.
Payroll data released by the Ministry of Labour and Employment suggests an increase in the number of formal workers in December 2022. EPFO enrollment increased by 14.93 lakh in the month, while ESIC enrollment surged by 18.03 lakh employees.
Agriculture and FMCG
FSSAI mulling packaged food items to have front of pack labeling based on recognisable symbols of how much energy, saturated fat, total sugar, sodium, and essential nutrients the packet contains per 100 gm or 100 ml.
An increase in the export of rapeseed meal and the revival of the export of soyabean meal helped India register overall oilmeals export growth of 69.6% during the first 10 months of FY23.
Healthcare
The Union Health Ministry is working on a ‘One Nation, One Organ Allocation’ policy with the states, which shall create uniform guidelines for registration, allocation, and other parts of the organ transplant process.
Commonly used hygiene products, including adult diapers, sanitary napkins and floor disinfectants, shall be made part of the National List of Essential Medicines. Inclusion in the NLEM shall ensure that such products are widely available, and may result in price regulation of the products.
The Department of Pharmaceuticals has released the first tranche of incentives under its Production-Linked Incentive scheme for pharmaceuticals, amounting to INR 166 crore.
Foreign affairs
US President Joe Biden’s administration is making another attempt at pushing through Eric Garcetti as its nominee for US Ambassador to India before the Senate committee on Foreign Relations next week.
German Chancellor Olaf Scholz is visiting India on 25-26 February, accompanied by senior officials and a business delegation.
Technology, Media and Telecommunications
The Telecom Regulatory Authority of India (TRAI) on Monday released its recommendations on ‘Rating of Buildings or Areas for Digital Connectivity’, wherein it has suggested that the government make digital infrastructure mandatory in building plans.
Ministry of Electronics and Information Technology (MeitY) will work with internet and social media intermediaries to create a framework for “trusted fact checkers”.
International trade and commerce
A delegation from Switzerland is in India this week for talks on a free trade agreement between India and European Free Trade Association (EFTA) (comprising Switzerland, Iceland, Liechtenstein and Norway)
India’s negotiations for proposed free trade agreements with the UK and Israel are reported to be proceeding well, with UK negotiations progressing to the next round of talks and Israel and India keen on finalising their agreement soon.
Banking, Finance and Insurance
SEBI issues consultation paper to streamline disclosure requirements for listed firms. The paper addresses challenges faced with regard to submission of the financial result for the first time by newly listed firms, among others.
Manufacturing
The Department of Pharmaceuticals under the Union government has released the first tranche of incentives under the Product Linked Incentive (PLI) scheme of pharmaceuticals amounting to Rs 166 crore to four selected applicants.
The government is considering the option of inviting fresh applications to bid for the fourth slot under its production linked incentive (PLI) scheme for advanced chemistry cell battery storage with a capacity of 20 GWH.
Logistics and Infrastructure
Indian Railways has completed an important milestone Tuesday by electrifying all routes in Uttar Pradesh, even as it embarks on a journey to become a ‘Net Zero Carbon Emission’ railway system in another seven years.
The Indian Government has recently announced that it is going to help Bhutan in building its third international internet gateway through facilitating a concessional rate reduce the cost of the operation.
Fair and equitable access to logistics for developing nations in international trade is said to be a top agenda item for New Delhi during its G20 presidency.
Sustainability and Energy
Ministry of New and Renewable Energy to blacklist renewable power companies for three-to-five years if they do not meet project completion deadlines.
The United Arab Emirates (UAE) will explore all partnership opportunities with India to help the country's growth and low carbon plans, said Sultan Ahmed Al Jaber, UAE's climate envoy and designated president of the COP28 summit.
Tracking the G20
This week saw two significant tracks in the G20 gain steam. The first culture working group meeting kicked off in Khajuraho, and the first G20 finance ministers and central bank governors meeting started in Bangalore.
The culture working group is significant for India as India’s soft power rises along side its growing global presence, while geopolitical cracks, which will be the overarching theme for global attention on India’s G20 presidency have started to come to the forefront at the finance ministers’ meet. On Thursday, in Bengaluru, US Treasury Secretary Janet Yellen urged for greater financial aid to be provided to Ukraine to assist in their ongoing fight against the year-long Russian invasion. As the United States prepares to provide an additional $10 billion in economic assistance in the coming weeks, Yellen emphasized the importance of increasing funding support for Ukraine. The day before, Yellen also met with Finance Minister Nirmala Sitharaman to discuss perspectives on strengthening multilateral development banks, global debt vulnerabilities, crypto assets, and health, besides the Just Energy Transition Partnership.
In operational developments, travellers from G20 countries arriving at Bengaluru, Mumbai and New Delhi international airports can now get Prepaid Payment Instruments wallets linked to UPI for making payments.
Upcoming Events
Understanding Urbanization in India
March 1 | Carnegie India, New Delhi
Carnegie India is hosting the next edition of the political economy seminar on “Understanding Urbanization in India” on 1st March, 2023 at Carnegie India, New Delhi. The seminar will use the report, “State of the Cities: India,” to discuss how urbanization has unfolded in India and its linkages to economic growth and demographic change and cover issues such as the measurement of urbanization, its form and structure, inclusion, and environmental security. Om Prakash Mathur, the principal author of the report will present the study and its findings, followed by a conversation with Anirudh Burman. The seminar will conclude with an open discussion with the audience. More Information | Registration Link
Law in the Age of Glocalisation: Covergence of India & the West
March 3-5 | The Imperial, New Delhi
The American Bar Association is hosting a conference on “Law in the Age of Glocalisation: Convergence of India and the West” from 3rd to 5th March, 2023 at The Imperial, New Delhi, bringing together leading practitioners, academicians, educators, and research scholars to exchange and share their experiences on all aspects of the present and future of the legal profession. Chief Justice of India, D. Y. Chandrachud will be the chief guest for the event, accompanied by other eminent dignitaries from the judicial system. More Information | Registration Link
Ethical Reflections on Contemporary India
February 24 | Hybrid
Centre for Policy Research is hosting a lecture on ‘Ethical Reflections on Contemporary India’ on 24 February, 2023 in a virtual format. Is it possible to bring groups with divergent views to discuss each other’s point of view? And do so reasonably, with an open mind? Rajeev Bhargava believes that the legitimate concerns of all those who feel disenchanted can actually be addressed using the lens of India Republic’s founding narrative and its ethical ideals. The talk will focus on what India’s collective good is and what is needed to heal some of its divisions. More Information | Registration Link
A Few Good Reads
In December, Arvind Subramanian and Josh Felman had argued that it would be difficult for India to replace China as an economic alternative. Now, Chief Economic Advisor, V. Anantha Nageswaran and Gurvinder Kaur push back, cautioning one on betting against India.
Ammar Nainar looks at the nascent but growing linkages between India’s defence and foreign affairs establishments.
Issues have plagued the setting up of a TSMC fabrication facility in the United States, as John Liu and Paul Mozur explore. What does that tell us about the constraints that underlie semiconductor fabrication?
Behind the train derailed in East Palestine, Ohio is a story of capitalism, oligopoly, misplaced regulation, under-investment and more. And these are problems that will infect dreams of a Green Hydrogen economy, Doomberg writes.
Noah Smith reminds you not to be a ‘doomer’.
Tweets of the Week
Max Roser provides a neat visualisation of technological progress, and how it has shot up in the recent past:
Stats of India highlights the slow, painful but certain recovery of the aviation industry from the pandemic’s woes:
Science is Strategic recaps the phenomenal year 2022 was for the clean energy industry:
Key Notifications
MeiTY invites proposals for estimation and measurement of digital economy.