Digital Currencies and Public Health Challenges in Macroeconomy
Source:Indian Express ↗
Why It Matters
These topics are highly relevant for the UPSC exam as they bridge public health targets (India's goal to eliminate TB by 2025) with critical economic reforms (financial regulation of digital assets and reducing dollar hegemony through rupee internationalisation).
Summary
The article addresses three major cross-cutting themes relevant for civil services preparation: the global and domestic challenges of tuberculosis elimination as detailed in the WHO's Global TB Report; the regulatory vacuum and economic risks associated with cryptocurrencies alongside the push for a sovereign digital rupee; and the strategic move towards the internationalisation of the Indian Rupee to safeguard forex reserves and enhance global trade footprint.
Key Points
- The Global TB Report by the WHO monitors global tuberculosis epidemiology, highlighting India's significant share of the global disease burden and the challenges facing the National TB Elimination Programme.
- Cryptocurrencies pose macroeconomic, regulatory, and security risks—such as terror financing and money laundering—leading to the RBI's cautious approach and the parallel development of a sovereign Central Bank Digital Currency (CBDC/e-Rupee).
- The internationalisation of the Indian Rupee involves using the INR for cross-border trade invoicing and settlement, which reduces dependence on the US Dollar and mitigates exchange rate risks.
- Achieving full rupee internationalisation requires structural measures, including the expansion of Special Rupee Vostro Accounts (SRVA), improving India's global export share, and navigating capital account convertibility constraints.
Important Terms
National TB Elimination Programme (NTEP)
India's public health initiative targeting TB elimination by 2025. It uses the "Detect-Treat-Prevent-Build" strategy and incorporates the Nikshay portal for tracking patient treatment and nutritional support (Nikshay Poshan Yojana).
UPSC context
GS Paper II (Social Justice/Health). Tests knowledge of national health missions and India's ambitious targets for disease elimination.
Internationalisation of the Indian Rupee
Increasing the Indian Rupee's use in cross-border transactions, trade invoicing, and as a reserve currency. It aims to reduce US Dollar dependency, lower transaction costs, and mitigate exchange rate volatility.
UPSC context
GS Paper III (Economy). Concerns macroeconomic stability, capital account convertibility, and India's growing influence in global trade finance.
End TB Strategy
A WHO framework aiming to end the global TB epidemic by 2030. Targets include a 90% reduction in deaths and an 80% reduction in incidence compared to 2015 levels.
UPSC context
GS Paper II (International Institutions). Tests understanding of global health targets and India’s commitment to Sustainable Development Goals (SDGs).
Foreign Trade Policy (FTP) 2023
A policy framework aiming for $2 trillion in Indian exports by 2030. It shifts from incentives to remission-based support and specifically promotes rupee-denominated trade settlements and e-commerce exports.
UPSC context
GS Paper III (Economy). Relevant for trade promotion, ease of doing business, and strategies to address the trade deficit.
Foreign Exchange Management Act (FEMA)
Legislation enacted in 1999 to regulate foreign exchange transactions and promote an orderly forex market. It replaced the restrictive FERA, categorizing violations as civil offenses rather than criminal ones.
UPSC context
GS Paper III (Economy). Key for regulatory frameworks governing FDI, FPI, and cross-border capital flows.
Global TB Report
An annual assessment by the WHO tracking progress toward global TB targets. It provides critical data on disease burden, funding gaps, and treatment success rates for all member nations.
UPSC context
GS Paper II/III (Reports & Indices). Essential for citing data in Mains answers regarding India's health indicators and social sector progress.
Prelims Trap
India’s National TB Elimination Programme aims to eradicate tuberculosis by 2030, in sync with the UN SDGs.
India’s domestic target for TB elimination is 2025, deliberately set five years ahead of the global UN Sustainable Development Goal (SDG) target of 2030.
Static Concepts Connected
What is Capital Account Convertibility (CAC)?
- Definition: The freedom to convert domestic currency into foreign currency to acquire global assets, liabilities, or capital.
- Current Status: India allows full current account convertibility but tightly restricts capital account convertibility to manage market volatility under FEMA regulations.
- Tarapore Committee: RBI committees (1997, 2006) recommended strict macroeconomic preconditions, like fiscal consolidation and inflation control, before achieving full CAC.
How do Special Rupee Vostro Accounts (SRVA) function?
- Vostro mechanism: An account opened by an authorized domestic Indian bank on behalf of a correspondent foreign bank, denominated in Indian Rupees.
- Trade settlement: Indian importers pay INR directly into the SRVA; Indian exporters are paid out of it, bypassing intermediate currencies like the US Dollar.
- Forex protection: Reduces dependence on hard currency reserves, insulating the domestic economy from external exchange rate shocks and geopolitical sanctions.
Cross-Topic Patterns
Rupee Settlement & De-dollarisation
The RBI's push for SRVAs links directly to Western financial sanctions (e.g., against Russia), driving the Global South to build SWIFT-independent financial architecture.
Crypto anonymity & PMLA constraints
Private cryptocurrencies circumvent traditional KYC norms, connecting directly to GS3 Internal Security topics like terror financing, hawala, and the challenges of enforcing the PMLA.
Health targets vs Disease Burden
India's aggressive 2025 TB target mirrors earlier ambitious vector-borne disease goals, often complicated in reality by rising antimicrobial resistance (AMR) and high out-of-pocket healthcare costs.
Expect a multi-statement prelims question in 2026 linking Special Rupee Vostro Accounts, capital account convertibility, and de-dollarisation.
Linked PYQs · 5
Linked PYQs · 5
- 2020MainsGS2
Critically examine the role of WHO in providing global health security during the Covid-19 pandemic.
- 2024MainsGS2
In a crucial domain like the public healthcare system the Indian State should play a vital role to contain the adverse impact of marketisation of the system. Suggest some measures through which the State can enhance the reach of public healthcare at the grassroots level.
- 2023MainsGS3
What is the status of digitalization in the Indian economy? Examine the problems faced in this regard and suggest improvements.
- 2018MainsGS3
How would the recent phenomena of protectionism and currency manipulations in world trade affect macroeconomic stability of India?
- 2025MainsGS3
What are the challenges before the Indian economy when the world is moving away from free trade and multilateralism to protectionism and bilateralism? How can these challenges be met?
