Note4Students
From UPSC perspective, the following things are important :
Prelims level: Role of Governors in State Universities
Mains level: Issues with role of Governor
A controversy has erupted in Kerala over the reappointment of a person as the Vice-Chancellor of Kannur University, with Governor saying he approved the decision against his “better judgment” as Chancellor.
Role of Governors in State Universities
- In most cases, the Governor of the state is the ex-officio chancellor of the universities in that state.
- Its powers and functions as the Chancellor are laid out in the statutes that govern the universities under a particular state government.
- Their role in appointing the Vice-Chancellors has often triggered disputes with the political executive.
A disputed case
- In Kerala’s case, the Governor’s official portal asserts that while as Governor he functions with the aid and advice of the Council of Ministers.
- While acting as Chancellor he acts independently of the Council of Ministers and takes his own decisions on all University matters.
- In marked contrast, the website of Rajasthan’s Raj Bhawan states that the “Governor appoints the Vice-Chancellor on the advice/ in consultation with the State Government”.
What about Central Universities?
- Under the Central Universities Act, 2009, and other statutes, the President of India shall be the Visitor of a central university.
- With their role limited to presiding over convocations, Chancellors in central universities are titular heads, who are appointed by the President in his capacity as Visitor.
- The VCs too are appointed by the Visitor from panels of names picked by search and selection committees formed by the Union government.
- The Act adds that the President, as Visitor, shall have the right to authorize inspections of academic and non-academic aspects of the universities and also to institute inquiries.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: 5G technology
Mains level: Issues with 5g rollout
The US Federal Aviation Administration (FAA) has issued directives to create a framework as well as gather more information about the potential effects of 5G on crucial aviation safety equipment.
What is 5G technology?
- 5G or fifth generation is the latest upgrade in the long-term evolution (LTE) mobile broadband networks.
- It mainly works in 3 bands, namely low, mid and high-frequency spectrum — all of which have their own uses as well as limitations.
Three bands of 5G
- The low band spectrum has shown great promise in terms of coverage and speed of internet and data exchange, the maximum speed is limited to 100 Mbps (Megabits per second).
- This means that while telcos can use and install it for commercial cellphones users who may not have specific demands for very high-speed internet, the low band spectrum may not be optimal for specialised needs of the industry.
- The mid-band spectrum, on the other hand, offers higher speeds compared to the low band but has limitations in terms of coverage area and penetration of signals.
- Telcos and companies, which have taken the lead on 5G, have indicated that this band may be used by industries and specialised factory units for building captive networks that can be moulded into the needs of that particular industry.
- The high-band spectrum offers the highest speed of all the three bands, but has extremely limited coverage and signal penetration strength.
- Internet speeds in the high-band spectrum of 5G have been tested to be as high as 20 Gbps (gigabits per second), while, in most cases, the maximum internet data speed in 4G has been recorded at 1 Gbps.
What is the issue?
- There is a threat of potential radar altimeter interference from 5G cellular in the 3700 MHz-3800 MHz frequency or the C-band.
- The 3700-4200 MHz band is close to the 4200 MHz-4400 MHz range used by aircraft radio altimeters.
Potential impacts
- Operations by aircraft including large jets could be limited or prohibited from using certain landing and navigation systems in places where there is scope for potential interference from new 5G cellular networks.
- The restrictions could be severe for smaller aircraft and helicopters.
- Overall, these could result in flight cancellations, delays or diversions in 46 places where these towers are, according to an aviation report.
What is the aircraft equipment that can be affected?
- The radio altimeter measures height (not altitude) of the aircraft above the surface immediately below the plane. It transmits a radio signal directly below.
- There are various other systems that depend on inputs from the radio altimeter — for example, predictive wind shear, ground proximity warning system, traffic collision avoidance system, and auto land.
- These effects are only when the aircraft is close to the ground, i.e. up to 2,500 ft above ground level (depending on the aircraft make).
- Any disturbance to internal radio altimeter readings caused by 5G or other equipment transmitting in frequency bands close to it can result in disastrous effects on crucial systems during approach/landing.
Impact of mobile phones
- 5G devices can interfere with aircraft altitude instruments and recommended that they should be turned off (or put to flight mode) during flight.
- Experts believe that electrical interference from a mobile phone could have been a factor in the crash of a small aircraft.
- The navigation system of the small aircraft could be disrupted by mobile phone signals.
- But up until now, there has been no evidence of a mobile phone having caused a crash.
What about the implications for India?
- Pilots in India are aware of the implications of 5G in the country.
- However, in India, 5G could be rolled out in the 3.2 GHz-3.6 GHz band, which may not have the potential to interfere with aircraft operations.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Chaperone Protein
Mains level: NA
Chaperones are a functionally related group of proteins assisting protein folding in the cell under physiological and stress conditions.
What are Chaperones?
- DNA is a linear chain of nucleotides, portions of which are faithfully transcribed into linear messenger RNA.
- The message in this RNA is translated into strings of amino acids – proteins.
- Proteins need to take a precise three-dimensional shape to become functional entities.
- This protein folding does not happen all by itself, at least most of the time.
- A special bunch of proteins called molecular chaperones assist in correctly folding the protein.
Functions of chaperone proteins
- In biological systems, Chaperones play crucial roles.
- Many molecular chaperones belong to the class of “heat shock” proteins (or stress-response proteins).
- This is because whenever an organism is subjected to elevated temperatures – a heat shock – proteins in the system begin to lose their native shapes, and chaperones are produced in large quantities to restore order.
General need of chaperones
Chaperones are needed under physiological conditions too, for normal cellular function since misfolding of proteins can cause a number of diseases.
- Alpha-synuclein protein, present in neurons, is wrongly folded in Parkinson’s disease.
- Brains of Alzheimer’s patients have plaques formed from aggregates of amyloid beta-peptide.
- This accumulation of amyloid fibrils is toxic, leading to widespread destruction of neurons – a ‘neurodegenerative’ disorder.
- Aberrant folding of crystallins of the eye lens leads to cataracts.
Types of Chaperones
- Major chaperones in humans include HSP70, HSC70 and HSP90: the numbers express the size of the proteins in kilodaltons.
- In normal cells 1%–2% of all proteins present are heat shock proteins.
- This number rises threefold during stressful conditions.
HSC70: The molecular thermometer
- HSC70 appears to be more like a molecular thermometer, with an ability to sense cold temperatures.
- It is induced by heat, whereas HSC70 is always present at high levels in normal cells.
- This knowledge comes from the study of an intriguing set of disorders, exemplified by Familial Cold Autoinflammatory Syndrome (FCAS).
HSC70 and HSP90: Role in Cancer
- Cancer cells divide at a break-neck pace, and heat shock proteins are very important in maintaining the stressful cancerous state.
- An overabundance of heat shock proteins in cancer cells is an indicator of a poor prognosis. Cancerous cells accumulate mutations in proteins that would normally suppress tumours.
- HSP70 and HSP90 play the roles of villains, as they continue to fold the mutated proteins, thus allowing tumor progression.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Buxa Tiger Reserve
Mains level: Success of Tiger Conservation
In a major success for tiger conservation, a photograph of a tiger was captured in a camera trap in West Bengal’s Buxa Tiger Reserve since 1998.
Locate all major tiger reserves in India.
Buxa Tiger Reserve
- Buxa Tiger Reserve is a tiger reserve in northern West Bengal, India, covering an area of 760 km2 (290 sq mi).
- In altitude, it ranges from 60 m in the Gangetic Plains to 1,750 m bordering the Himalayas in the north.
- Its northern boundary runs along the international border with Bhutan.
- The Sinchula hill range lies all along the northern side of BTR and the eastern boundary touches that of the Assam state.
Key features of BTR
- It is the easternmost extension of extreme bio-diverse North-East India and represents highly endemic Indo-Malayan region.
- The fragile “Terai Eco-System” constitutes a part of this reserve.
- The Phibsoo Wildlife Sanctuary of Bhutan is contiguous to the north of BTR.
- It serves as an international corridor for Asian elephant migration between India and Bhutan.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Legal basis for MSP
Context
Amid the demand for a guarantee of MSP, many commentators fail to understand the true spirit of the demand for a legal MSP.
How demand for legal backing for MSP is misinterpreted?
- Mandatory enforcement of price above MSP: The demand has been interpreted as a mandatory enforcement of trade in agricultural produce, including private trade to be necessarily at or above the MSP for that crop.
- Nationalisation of agricultural trade: Another interpretation is the nationalisation of agricultural trade whereby the government promises to buy all the crop produced at MSP.
- Commentators have been using these two interpretations to project large estimates of government expenditure needed to implement.
- They fail to understand the true spirit of the demand for a legal MSP.
Current nature of MSP
- It is not an income support program: By definition MSP is not an income support programme.
- Intervention to stabilise prices: It is designed to be used as government intervention to stabilise prices, to provide remunerative prices to farmers.
- Public procurement program to meet requirements of NFSA: Currently, it is no more than a public procurement programme to meet the requirements of the National Food Security Act (NFSA).
- Only rice and wheat procured: As against the official announcement of MSP for 23 crops, only two, rice and wheat are procured as these are distributed in NFSA.
Larger context of demand for legal backing to MSP
- Droughts and declining commodity prices: In addition to the twin droughts of 2014 and 2015, farmers have also suffered from declining commodity prices since 2014.
- Impact of demonetisation and GST: The twin shocks of demonetisation and hurried rollout of GST, crippled the rural economy, primarily the non-farm sector, but also agriculture.
- Impact of pandemic: The slowdown in the economy after 2016-17 followed by the pandemic has ensured that the situation remains precarious for majority of the farmers.
- Increased input prices: Higher input prices for diesel, electricity and fertilisers have only contributed to the misery.
- In this context, the demand for ensuring remunerative prices is only a reiteration of the promise by successive governments to implement the Swaminathan Committee report.
What should be the true nature of MSP?
- Intervene to stabilise price: A true MSP requires the government to intervene whenever market prices fall below a pre-defined level, primarily in case of excess production and oversupply or a price collapse due to international factors.
- It does not require the government to buy all the produce but only to the extent that creates upward price pressures in the market to stabilise prices at the MSP level.
Way forward
- Mechanism for market intervention: What is needed is a mechanism to monitor the prices.
- While such a mechanism already exists, a policy for requisite market intervention is missing.
- Use MSP as incentive to achieve nutritional security and reduce import dependence: MSP can also be an incentive price for many of the crops which are desirable for nutritional security such as coarse cereals, and also for pulses and edible oils for which we are dependent on imports.
- Include pulses, edible oil and millets in PDS: Despite repeated demands from food activists, there has not been any progress in including pulses, edible oils and millets in PDS.
- A guaranteed MSP then is nothing more than restoring the true spirit and functions of MSP, applicable to a broad range of crops and all sections of farmers.
Issues
- The current MSP regime has no relation to prices in the domestic market.
- Its sole raison d’être is to fulfil the requirements of NFSA making it effectively a procurement price rather than an MSP.
- It is basically a lack of understanding of what agriculture needs and above all a lack of political commitment to ensure remunerative prices to farmers.
Conclusion
An efficient and functional MSP is certainly the least that the government can do to protect a sector which remains the largest employer and a refuge for the poor and vulnerable as was seen during the pandemic.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Challenges to GST
Context
Seen purely from a revenue point of view and as a fiscal policy tool, India’s GST is still on a rocky road.
Background
- The GST was launched by India on the midnight of July 1, 2017.
- Benefits of GST: Hailed as a landmark reform in India’s tax history, it was expected to improve tax-GDP ratio, end tax cascading, enhance efficiency, competitiveness, growth, and ensure lower prices.
- Fiscal federalism: It was also projected as a watershed in India’s fiscal federalism.
- the States have forgone a substantial part of their own tax revenue.
- States were in turn guaranteed a GST compensation assuring 14% growth in their GST revenue during the initial five years.
- India’s GST architecture: India’s GST architecture is built on the firm foundations of a GST Council and the GST Network (GSTN).
- GST Council as due federal process: The first is the key decision-making body, chaired by the Union Finance Minister with a Minister of State in charge of Finance and the Finance Ministers of States as members.
- This is envisaged as a due federal process to protect the interests of the States.
Unresolved issues
[1] Revenue neutrality not achieved
- India’s GST paradigm stands on two key pillars: revenue neutrality and GST compensation for the States.
- The assured revenue neutrality remains a mirage and many States have experienced a declining tax-GDP ratio.
- Decline in tax to GDP ratio of state: In the case of major 18 States, the ratio of own tax revenue to GDP has declined.
- While the share of the Centre in total GST increased by 6%, that of States put together lagged behind with only a 4.5% increase.
- Stark differences between the Revenue Neutral Rates (RNR) for the producing States and consumption State have been observed. States producing exempted food grains also lost out.
- Since the rates were lower under GST vis-à-vis the VAT regime, revenue neutrality was not adhered ab initio.
- The problems were compounded with massive evasion following the dismantling of check posts, and later on fake invoices, that grew by leaps and bounds.
- Experience of other countries: The South African experience illustrates how zero-rating and large exemptions have defeated revenue goals.
- Canadian experience shows that GST could be improved by limiting zero rating, tax-exemptions and harmonising tax rates.
- The resilience of the economy at the time of rolling out of GST is critical for its wider reception as the Australian experience shows.
[2] Not conducive to co-operative federalism
- While the States collectively forewent 51.8% of their total tax revenue, the Centre surrendered only 28.8%.
- Yet, GST is shared equally between the Centre and States despite two expert committees recommended for a higher share for the States.
- Given the revenue neutrality failure and the host of other issues, many of the States are left with no option except to depend on GST compensation.
- This is not conducive to sustainable co-operative federalism.
[3] Need for revenue sharing formula for IGST
- Although IGST is a key source of revenue for many of the States, the clearing house mechanism and the process therein remains unknown territory.
- It was pointed out that GST is discriminatory to manufacturing States, indicating the need for a revenue sharing formula that duly incentivises exporting States by sharing IGST revenue among three parties instead of two.
[4] Other issues
- Swift functioning of Input tax credit: The Malaysian experience demonstrates the need for swift and transparent functioning of the input tax credit system through a flawless IT infrastructure.
- We operate in an almost information vacuum especially with respect to IGST along with several glitches in the digital architecture.
- GSTN is now in the doldrums.
- Data monopoly: It neither makes effective use of the massive and invaluable data being generated nor shares them to enable others to make use of them.
- Such practice in “data monopoly” was a fact of history in India’s statistical system and has to go sooner rather than later.
- Australia, having several similarities with India, in terms of Centre and the subnational units, and destination-based, multi-stage tax with input credit provisions, has not been revenue-buoyant.
- It is a matter for consideration whether widening exemptions and the replacing of income-tax by GST in the case of small and medium enterprises are advisable measures in the Indian context.
Consider the question “What are the challenges facing the GST in India? What India can learn from the experience of other countries’ experience.”
Conclusion
Despite many years of efforts in evolving an Indianised GST system and over 50 months of adjustments with over a thousand notifications, with accompanying uncertainties in the first year and the novel coronavirus pandemic and the lockdown still in the saddle, GST continues to be an unfinished agenda. But how far and how long?
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: International Solar Alliance (ISA)
Mains level: Success of the ISA
The UN General Assembly has conferred Observer Status to the International Solar Alliance (ISA).
Significance of ‘Observer’ Status
- Observer status is a privilege granted by some organizations to non-members to give them the ability to participate in the organization’s activities.
- It is often granted by intergovernmental organizations (IGO) to non-member parties and international nongovernmental organizations (INGO) that have an interest in the IGO’s activities.
- Observers generally have a limited ability to participate in the IGO, lacking the ability to vote or propose resolutions.
About International Solar Alliance (ISA)
Hq: Gurugram, India
- The ISA is an alliance of more than 121 countries, most of them being sunshine countries, which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn.
- The primary objective of the alliance is to work for efficient exploitation of solar energy to reduce dependence on fossil fuels.
- The alliance is a treaty-based inter-governmental organization.
- The initiative was launched by PM Modi at the India Africa Summit and a meeting of member countries ahead of the 2015 United Nations Climate Change Conference in Paris in November 2015.
- A total of 80 countries have signed and ratified the ISA Framework Agreement and 101 countries have only signed the agreement.
Objectives of the ISA
- To mobilize investments of more than USD 1000 billion by 2030
- To take coordinated action for better harmonization, aggregation of demand, risk and resources, for promoting solar finance, solar technologies, innovation, R&D, capacity building etc.
- Reduce the cost of finance to increase investments in solar energy in member countries
- Scale up applications of solar technologies in member countries
- Facilitate collaborative research and development (R&D) activities in solar energy technologies among member countries
- Promote a common cyber platform for networking, cooperation and exchange of ideas among member countries
What does ISA formation signify?
- Climate action commitment: It symbolizes about the sincerity of the developing nations towards their concern about climate change and to switch to a low-carbon growth path.
- Clean energy: India’s pledge to the Paris summit offered to bring 40% of its electricity generation capacity from non-fossil sources (renewable, large hydro, and nuclear) by 2030.
- Global electrification: India has pledged to let solar energy reach to the most unconnected villages and communities and also towards creating a clean planet.
- Global cooperation: It is based on world cooperation irrespective of global boundaries.
- India’s Soft power: For India, possible additional benefits from the alliance can be a strengthening of ties with the major African countries and increasing goodwill for India among them.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Global Methane Initiative, GMI
Mains level: GHGs emission
India has co-chaired along with Canada the Global Methane Initiative leadership meet held virtually.
About Methane
- Methane is a greenhouse gas, which is also a component of natural gas.
- There are various sources of methane including human and natural sources.
- The anthropogenic sources are responsible for 60 per cent of global methane emissions.
- It includes landfills, oil and natural gas systems, agricultural activities, coal mining, wastewater treatment, and certain industrial processes.
- The oil and gas sectors are among the largest contributors to human sources of methane.
- These emissions come primarily from the burning of fossil fuels, decomposition in landfills and the agriculture sector.
Global Methane Initiative (GMI)
- GMI is a voluntary Government and an informal international partnership having members from 45 countries including the United States and Canada.
- The forum has been created to achieve global reduction in anthropogenic methane emission through partnership among developed and developing countries having economies in transition.
- The forum was created in 2004 and India is one of the members since its inception and has taken up Vice-Chairmanship for the first time in the Steering Leadership along with USA.
- National governments are encouraged to join GMI as Partner Countries, while other non-State organizations may join GMI’s extensive Project Network.
Focus areas
The initiative currently focuses on five sectors, which are known sources of anthropogenic methane emissions:
- Agriculture
- Coal mining
- Municipal solid waste
- Municipal wastewater
- Oil and gas systems
Why focus on Methane?
- The emission of methane is a big concern as it is a greenhouse gas having 25-28 times harmful effect than carbon dioxide
- According to the UN, 25 % of the warming that the world is experiencing today is because of methane.
- Methane is the second-most abundant greenhouse gas in the atmosphere, after carbon dioxide.
- According to IPCC, methane accounts for about half of the 1.0 degrees Celsius net rise in global average temperature since the pre-industrial era.
Back2Basics: CO2 Equivalents
- Each greenhouse gas (GHG) has a different global warming potential (GWP) and persists for a different length of time in the atmosphere.
- The three main greenhouse gases (along with water vapour) and their 100-year global warming potential (GWP) compared to carbon dioxide are:
1 x – carbon dioxide (CO2)
25 x – methane (CH4) – I.e. Releasing 1 kg of CH4into the atmosphere is about equivalent to releasing 25 kg of CO2
298 x – nitrous oxide (N2O)
- Water vapour is not considered to be a cause of man-made global warming because it does not persist in the atmosphere for more than a few days.
- There are other greenhouse gases which have far greater global warming potential (GWP) but are much less prevalent. These are sulphur hexafluoride (SF6), hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs).
- There are a wide variety of uses for SF6, HFCs, and PFCs but they have been most commonly used as refrigerants and for fire suppression.
- Many of these compounds also have a depleting effect on ozone in the upper atmosphere.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Raidioactivity
Mains level: Water Pollution
Radioactive pollution of water is newly emerging but is of grave concern for water pollution and human health.
Quick recap: Radioactivity
- Radioactivity is the phenomenon of spontaneous emission of particles or waves from the unstable nuclei of some elements.
- There are three types of radioactive emissions: Alpha, Beta and Gamma.
- Alpha particles are positively charged He atoms, beta particles are negatively charged electrons and gamma rays are neutral electromagnetic radiations.
- Radioactive elements are naturally found in the earth’s crust.
Radioactive contamination of Water
- Natural: Percolation of naturally occurring radioactive materials (NORM) from the soil sediments to the aquifer causes groundwater contamination.
- Man-made: Anthropogenic sources of such pollution include- nuclear weapon investigation, nuclear calamities, nuclear powerhouses and dumping of radioactive waste.
Various contaminant elements
- Uranium, thorium and actinium are three NORM series that contaminate water resources.
- A number of radionuclides are found in surface and subsurface waters, among which 3H, 14C, 40K, 210Pb, 210Po, 222Rn, 226Ra, 228Ra, 232Th and 234,235,238U are common.
- Strontium-90, Caesium-137, etc are also formed by nuclear reactors, along with numerous unnecessary radioisotopes wastes.
- 40K and 7Be are the most commonly found radioactive elements in the sludge generated in sewage treatment plants.
- Nuclear reactors produce radioisotopes (Cobalt-60, Iridium-192, etc) that hand out as sources of gamma radiation in radiotherapy and numerous industrial appliances.
Oceanic sources
- Oceans and seas are the natural repositories of naturally occurring uranium. It is found in the form of uranyl carbonate ion.
- A significant concentration of uranium is supposed to be found in the greater salinity of the marine water.
- 40K (Radioactive Potassium) is also found in considerable concentration in the marine environment.
Measuring radioactive pollution
- Radioactivity is measured in Becquerel (SI unit) or in Curie.
- Energy absorbed per unit mass is measured by Gray, while the unit Sievert measures the quantity of radiation absorbed by human tissues.
- A small amount of radiation is found in all types of water but the extended amount of radiation is harmful to human health.
- Radioactivity in drinking water can be determined by a gross alpha test.
Hazards of such pollution
- Radioactive elements have an effect on the environment and can cause a risk to human healthiness if inhaled, injected or exposed.
- Human tissues absorb radiation through polluted water and foodstuff, which can cause serious health risks.
- High doses of radiation can cause acute radiation syndrome or cutaneous radiation injury.
- Exposure to radiation causes various disorders in human physiology, including cancer, leukaemia, genetic mutations, osteonecrosis, cataracts and chromosomal disruption.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: IXPE
Mains level: Not Much
NASA has launched a new mission named Imaging X-ray Polarimetry Explorer or IXPE.
About IXPE
- IXPE observatory is a joint effort of NASA and the Italian Space Agency.
- The mission will study “the most extreme and mysterious objects in the universe – supernova remnants, supermassive black holes, and dozens of other high-energy objects.”
- The mission’s primary length is two years and the observatory will be at 600 kilometers altitude, orbiting around Earth’s equator.
- IXPE is expected to study about 40 celestial objects in its first year in space.
What are the instruments onboard?
- IXPE carries three state-of-the-art space telescopes.
- Each of the three identical telescopes hosts one light-weight X-ray mirror and one detector unit.
- These will help observe polarized X-rays from neutron stars and supermassive black holes.
- By measuring the polarization of these X-rays, we can study where the light came from and understand the geometry and inner workings of the light source.
- This new mission will complement other X-ray telescopes such as the Chandra X-ray Observatory and the European Space Agency’s X-ray observatory, XMM-Newton.
Why is it important?
The mission will help scientists answer questions such as:
- How do black holes spin?
- Was the black hole at the center of the Milky Way actively feeding on surrounding material in the past?
- How do pulsars shine so brightly in X-rays?
- What powers the jets of energetic particles that are ejected from the region around the supermassive black holes at the centers of galaxies?
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Sarayu River
Mains level: River interlinking and associated issues
PM will inaugurate the Saryu Nahar National Project.
Saryu Nahar National Project
- The Project involves the interlinking of five rivers – Ghaghara, Saryu, Rapti, Banganga and Rohini to ensure optimum usage of water resources of the region.
- It will benefit nine districts of Eastern Uttar Pradesh namely – Bahraich, Shravasti, Balrampur, Gonda, Siddharthnagar, Basti, Sant Kabir Nagar, Gorakhpur and Maharajganj.
- The sub canals with a length of 6,600km have been linked to the 318km main canal.
- The work on the project started in 1978 but due to lack of continuity, it got delayed and was not completed even after nearly four decades.
Benefits offered
- The project will provide assured water for irrigation of over 14 lakh hectares of land and benefit about 29 lakh farmers of over 6200 villages.
- The farmers of the region, who were the worst sufferers of the inordinate delay in the project, will now immensely benefit from the upgraded irrigation potential.
- They will now be able to grow crops on a larger scale and maximize the agri-potential of the region.
Back2Basics: Sarayu River
- The Sarayu is a river that originates at a ridge south of Nanda Kot mountain in Bageshwar district in Uttarakhand.
- It flows through Kapkot, Bageshwar, and Seraghat towns before discharging into the Sharda River at Pancheshwar at the India—Nepal border.
- Lower Ghaghara is also popularly known as Sarayu in India.
- Especially while it flows through the city of Ayodhya, the birthplace of legendary Rama.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Issues related to use of AFSPA
Context
The death of civilians in Nagaland in a security operation has revived the debate about AFSPA.
Demand for repeal of AFSPA
- Some years ago, all the northeastern states had come together to demand the annulment of this Act.
- That remained in the realm of yet another “demand”.
- In 1997, after Nagaland’s most enduring insurgent outfit, the National Socialist Council of Nagalim (NSCN), led by Isak Swu and T H Muivah, first decided to talk peace with the Indian government, the Naga Peoples’ Movement for Human Rights (NPMHR) had approached the Supreme Court for revocation of the Act.
- Enabling legislation: The apex court had then upheld its constitutionality and said it was an enabling legislation that confers minimum powers on the army to operate in situations of widespread internal disorder.
Way forward
- Talk to the other groups: Many are wondering if the peace talks between the NSCN (IM) and the government of India now lie in tatters.
- The media has focussed exclusively on the NSCN (IM) and ignored the other Naga National Political Groups (NNPGs), who have been brought on board because they are Nagaland-based and speak exclusively for Nagaland.
- The NNPGs and the Gaon Bura Association of Nagaland doubt NSCN(IM)’s ability to bring lasting peace in Nagaland.
- Since 2015, the Nagaland Gaon Bura Association, the apex body of Nagas which includes all the 16 recognised tribes and the NNPGs barring the NSCN (IM), have sent several memorandums to the government.
- These representatives of the Naga people do not demand a separate flag or constitution because they understand these are tenuous demands.
- These groups have also never raised the sovereignty issue.
- The working committee of the seven NNPGs, roped in to join the peace talks, are also opposed to the idea of changing interlocutors as and when the NSCN (IM) decides.
- Reconsider use of AFSPA: There is a need to reconsider the use of the army and AFSPA when killings have reduced considerably.
- The apex body has specifically mentioned that they want to be delivered from the gun culture.
- Check the misuse of FMR: Countering insurgency in the Northeast is fraught also because of the Free Movement Regime (FMR) between India and Myanmar.
Conclusion
The government need to reconsider the use of AFSPA and also focus on other measures to ensure peace and stability in these regions.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Suspension of MPs
Context
Twelve members of the Rajya Sabha were suspended for their alleged involvement in the grave disorder in the House on the last day of the previous session.
What do Rajya Sabha’s rules of procedure say about the suspension of a member?
- Rule 256 of Rajya Sabha’s rules of procedure provides for the suspension of a member who disregards the authority of the chair or abuses the rules of the council by persistently and willfully obstructing the business of the House.
- Persistent and willful obstruction of the business of the House is the crux of the offence.
- What is the maximum period of suspension? Suspension can be for a period not exceeding the remainder of the session.
- This would mean that if the member is suspended on the last day of the session, the period of suspension will be only a day.
- So, even if a government would like to suspend such a member for a longer period. it would not be possible under the present rule.
- Unless the House itself revokes the suspension nothing can be done about it.
- The decision of the House is final.
- Every legislature has the power to suspend its members if they cause disorder and obstruct the business of the House.
- But the rule of suspension is rarely invoked in parliaments in mature democracies.
Whether the existing rules permit such a course of action?
- Rule 256 says that the chairman may, if he deems it necessary, name a member who either disregards the authority of the chair or abuses the rules of the House by persistently and willfully obstructing the business of the House.
- Sub Rule 2 of this rule is of very great importance in the context of the main question, namely, whether a member can be suspended in the next session for creating disorder in the previous session.
- No adjournment is allowed: It clearly says no adjournment is allowed, which means the matter of suspension cannot be adjourned to a later period.
- It needs to be decided then and there.
- A member who abuses the rules of the House by persistently and willfully obstructing its business needs to be punished swiftly.
- No adjournment is allowed at all.
The powers of the House to regulate its internal matters
- It can be said that the rule under which the members were suspended does not actually permit it.
- Absolute power to interpret rule: The House is supreme in these matters and the chair has absolute powers to interpret the rules.
- The judiciary has time and again clarified that the House has absolute powers to regulate its internal matters.
- Suspension of a member is such a matter.
- The judiciary will intervene only when a patently unconstitutional act is done by the House.
Conclusion
The solution to disruptions does not lie in suspension. That is the lesson we should learn from past experience.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Cancer related fatality in India
Tobacco use is known to be a major risk factor for several non-communicable diseases in India.
Tobacco abuse in India
- In India, 28.6% of adults above 15 years and 8.5% of students aged 13-15 years use tobacco in some form or the other.
- This makes the country the second-largest consumer of tobacco in the world.
Concern: No action against Tobacco
- India bears an annual economic burden of over ₹1, 77,340 crores on account of tobacco use.
- There has been no major increase in taxation of tobacco products to discourage the consumption of tobacco in the past four years since the introduction of GST.
- Only in 2020-21, the Union Budget had the effect of increasing the average price of cigarettes by about 5%.
- Yet, the excise duty on tobacco in India continues to remain extremely low.
A worrying trend
- No increase in tax: The absence of an increase in tax means more profits for the tobacco industry and more tax revenue foregone for the government.
- Revenue losses: This revenue could have easily been utilized during the COVID-19 pandemic.
- Losses due to GST: There has been a 3% real decline in GST revenues from tobacco products in each of the past two financial years.
Present governance of Tobacco
- GST slab: Tobacco at present is a highly taxed commodity. It is kept in the 28% GST slab (other than for tobacco leaves which is taxed at 5%).
- Heavy cess: Tobacco and its various forms are also subject to a heavy burden of cess, given that the commodity is seen as a sin good.
- Statutory warning: The government also uses pictures of cancer patients on the packages of cigarettes to discourage its use.
Federal issues
- Excise taxes on many tobacco products used to be regularly raised in the annual Union Budgets before the GST.
- Similarly, several State governments used to regularly raise value-added tax (VAT) on tobacco products.
- During the five years before the introduction of the GST, most State governments had moved from having a low VAT regime on tobacco products to having a high VAT regime.
Implication of such policies
- Increased consumption: The lack of tax increases in post-GST years might mean that some current smokers smoke more now and some non-smokers have started smoking.
- Reverse trend in decline: This could potentially lead to a reversal of the declining trend in prevalence.
- Affordability: Tobacco products are more affordable post-GST as shown in recent literature from India.
- Missing up national target: This might jeopardise India’s commitment to achieving 30% tobacco use prevalence reduction by 2025 as envisaged in the National Health Policy of 2017.
Way forward
- Several countries in the world have high excise taxes along with GST or sales tax and they are continuously being revised.
- We must adhere to the WHO recommendation for a uniform tax burden of at least 75% for each tobacco product.
- The Union government should take a considerate view of public health and significantly increase excise taxes — either basic excise duty or NCCD — on all tobacco products.
- Taxation should achieve a significant reduction in the affordability of tobacco products to reduce tobacco use prevalence and facilitate India’s march towards sustainable development goals.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: US-China Rivalry
The US Government has decided not send any official representation to the Winter Olympic Games in Beijing announcing what is being called a “diplomatic boycott” of the games.
What is a ‘diplomatic boycott’?
- A “diplomatic boycott” means no US official will be present at the Winter Olympics in Beijing.
- This stops short of a complete boycott, which would have meant the non-participation by US athletes.
- As such, the absence of official representation will not impact the games as much as an athletic boycott would have.
What led to the US boycott?
Ans. Uyghurs Genocide
- The decision was taken because of China’s gross human rights abuses and atrocities in Xinjiang.
- This is the latest clash adding to a long list of differences on trade, Taiwan, human rights and the South China Sea.
- Xinjiang Uyghurs have been sent by Chinese authorities to “re-education” camps, a network of which were constructed beginning in 2016 to house thousands of detainees.
- Beijing initially denied the existence of the camps, but subsequently claimed the centres were for “vocational training”.
Who else is ‘diplomatically boycotting’ the games?
- So far, Australia, Canada, and New Zealand have also announced that their officials will not be present at the games.
- None, however, has said their athletes will not attend, which means the games themselves are unlikely to be impacted.
- It remains to be seen if the boycott will gain traction beyond US allies and partners.
- Russian President Vladimir Putin will travel to Beijing for the opening of the Winter Olympics.
- China has been garnering support from countries in Asia, Africa and Latin America.
How is China reacting to the boycott?
- Beyond the statements decrying the “politicization” of sports, there is certainly a domestic political undercurrent to the games.
- China’s media, meanwhile, has been largely playing down the reports of the boycotts, underlining how the authorities are going all-out to ensure the games are conducted without a hurdle.
What will be the impact on US-China relations?
- Much recently, the US and Chinese Presidents committed to “responsibly” managing their growing competition amid increasing conflicts.
- Both nations called common-sense guardrails to ensure that competition does not veer into conflict.
- China emphasized the “need to treat each other as equals” and warned against “drawing ideological lines”, calling on the US “to meet its word of not seeking a ‘new Cold War’”.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: CAA
Mains level: CAA debate
This newscard is an excerpt from the ‘Letter and Spirit’ section in the print edition of TH, which is a new column that will focus on explaining and understanding basic Acts and Articles enshrined in our Constitution.
Context
- With the contentious farm laws repealed, the discussions turn to the second most politically and legally resisted legislation of recent times, The Citizenship (Amendment) Act, 2019.
- The citizenship question finds its retro-reflection in the Constituent Assembly debates which serve as the undeniable autobiography of India’s basic law.
Debate over CAA, yet again
- CAA asserts that only people belonging to some faiths are victims of persecution and violence and the doors of the country can be legitimately shut to any other instance of persecution and ethnic violence.
A ‘headache’ for the Drafting Committee
- The citizenship question had been one of the most difficult tasks confronted by the drafting committee as admitted by Dr B.R.Ambedkar.
- He moved a set of consolidated amendments to the citizenship provisions of the original draft.
- He said that the task had given the drafting committee “such a headache” and multiple “drafts were prepared” and “destroyed” before arriving at a consensus.
The critics
- The draft did not satisfy all but to the most due to its secular and liberal provisions.
- It was fiercely contested on the floor of the Constituent Assembly on religious, ethnic and hyper-nationalistic considerations.
- The Article 5 of the draft constitution was criticized for its lack of exclusive and preferential provisions on religious lines regarding the declaration as to who shall be the citizen of India during commencement of the Constitution.
- Then Article 5A (today’s Article 7 of the Constitution) sought to grant citizenship rights to the migrants of Pakistan who had returned to India under a permit for resettlement granted by Indian authorities.
The ‘Jus Soli’ Principle
- This principle is premised on the automatic grant of citizenship based on the place of birth provided the person is domiciled in India, qualifying it with religious identity.
- It was in fact a proposal to ingrain religion into the bedrock of the Constitution.
- Dr P.S.Deshmukh from the Central Provinces and Berar proposed changes to Article 5 of the draft by proposing to replace the universally honoured “jus soli” principle by qualifying it with a religion.
- He went on to state that every person who is a Hindu or a Sikh by religion and is not a citizen of any other State, wherever he resides shall be entitled to be a citizen of India.
Issue over indiscriminate grant of citizenship
- The concern of Dr. Deshmukh justifying the exclusion of people belonging to other religions, as echoed in his question- Is it then wise that we should throw opens our citizenship so indiscriminately?
- It found fraternal support from members who opined that Hindus and Sikhs have no other home but India.
- This finds its resonance today in the presumptive base of the CAA.
The defenders
- Some highlighted the fact of panic driven migration without certain intention to settle down in Pakistan was left unanswered with precision.
- Some retorted that mentioning the name of some communities will make other communities feel that they were being ignored.
What did Nehru opine?
- Nehru stated that we cannot have rules for Hindus, for Muslims and for Christians only.
- He stressed upon the possibility of the second wave of migration including non-Hindus and non-Sikhs who were part of the first wave influx.
- Hence, in his view, foreclosing the doors fearing the influx of some may deprive others of exercising their choice.
Ambedkar on Pakistan returnees
- Ambedkar clarified that the principal thrust of Article 5A was to declare that persons who migrated to Pakistan after 1st of March 1947 due to internal disturbances.
- He declared that some migrants from Pakistan were allowed to return on the basis of the agreements between both the Governments and on the basis of an ordinance promulgated.
Conclusion
- The Constituent Assembly debates on citizenship showed that in the rousing of sentiments of ethnicity and distrust, sagacity had an upper hand, leading to the saner denouement of toleration.
- History is known to set examples.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Non-convertible Debentures
Mains level: Not Much
Several companies have announced public issues to raise funds through non-convertible debentures.
What are Debentures?
- Debentures are long-term financial instruments issued by a company for specified tenure with a promise to pay fixed interest to the investor.
- They can be held by individuals, banking companies, primary dealers other corporate bodies registered or incorporated in India and unincorporated bodies.
- Their types include:
- Convertible debentures (CDs): They are a type of debentures that can be converted into equity shares of the company.
- Non-convertible debentures (NCDs): They are defined as the type of debentures that cannot be converted into equity shares of the company.
What are NCDs?
- Some debentures have a feature of convertibility into shares after a certain point of time at the discretion of the owner.
- The debentures which can’t be converted into shares or equities are called non-convertible debentures (or NCDs).
- They are debt financial instruments that companies use to raise medium- to long-term capital.
Benefits offered by NCDs
- At a time when fixed deposit rates are in low single digits, these NCD offerings look lucrative.
- NCDs offer interest rates between 8.25–9.7%.
Risks posed
- Although NCDs are generally considered safe fixed-income instruments, some recent defaults have made investors cautious.
- NCDs can be either secured by the issuer company’s assets, or unsecured.
- Certain issuers, with credit rating below investment grade, had in the past issued both a secured NCD and another unsecured one through the same offer document, with different credit ratings.
- The risk is high in the case of unsecured NCDs, even though they offer high-interest rates.
- Credit rating of the issuer is a key factor to consider before investing in any NCD.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Global Health Security Index, 2021
Mains level: Health security
Countries across all income levels remain dangerously unprepared to meet future epidemic and pandemic threats, according to the new 2021 Global Health Security (GHS) Index.
About GHS Index
- The GHS Index is the first comprehensive assessment and benchmarking of health security and related capabilities across the 195 countries that make up the States Parties to the International Health Regulations.
- It is a project of the Johns Hopkins Centre for Health Security, the Nuclear Threat Initiative (NTI) and the Economist Intelligence Unit (EIU) and was first launched in October 2019.
- It assesses countries across 6 categories, 37 indicators, and 171 questions using publicly available information.
- It benchmarks health security in the context of other factors critical to fighting outbreaks, such as political and security risks, the broader strength of the health system, and country adherence to global norms.
Parameters assessed
The report is based on a questionnaire of 140 questions, organized across 6 categories, 34 indicators, and 85 sub-indicators. The six categories are:
- Prevention: Prevention of the emergence or release of pathogens
- Detection and Reporting: Early detection and reporting for epidemics of potential international concern
- Rapid Response: Rapid response to and mitigation of the spread of an epidemic
- Health System: Sufficient and robust health system to treat the sick and protect health workers
- Compliance with International Norms: Commitments to improving national capacity, financing plans to address gaps, and adhering to global norms
- Risk Environment: Overall risk environment and country vulnerability to biological threats
Global performance
- In 2021, no country scored in the top tier of rankings and no country scored above 75.9, the report showed.
- The world’s overall performance on the GHS Index score slipped to 38.9 (out of 100) in 2021, from a score of 40.2 in the GHS Index, 2019.
- This, even as infectious diseases are expected to have the greatest impact on the global economy in the next decade.
- Some 101 countries high-, middle- and low-income countries, including India, have slipped in performance since 2019.
Indian scenario
- India, with a score of 42.8 (out of 100) too, has slipped by 0.8 points since 2019.
- Three neighboring countries — Bangladesh, Sri Lanka and Maldives — have improved their score by 1-1.2 points.
Conclusion
- Health emergencies demand a robust public health infrastructure with effective governance.
- The trust in government, which has been a key factor associated with success in countries’ responses to COVID-19, is low and decreasing, the index noted.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: AFSPA
Mains level: Paper 2- Repealing AFSPA
Context
The killing of 14 civilians in Nagaland in a security operation has sparked debate over the Armed Forces Special Powers Act (AFSPA).
Case for repeal of AFSPA
- The repeal of AFSPA is necessary not just for restoring constitutional sanity, but also as a way of acknowledging dark history of our conduct in Nagaland.
- If the moral case for repealing AFSPA is strong, the political case points in the same direction as well.
- Need for ensuring individual dignity: The political incorporation of Nagaland (and all other areas where this law applies) will be set back if the guarantees of individual dignity of the Indian Constitution are not extended.
- Not state of exception: We often describe AFSPA in terms of a “state of exception”.
- But this theoretical term is misleading. How can a law that has been in virtually continuous existence since 1958 be described as an “exception”.
Why AFSPA is counterproductive to Army
- Distortion of choice: First, giving wide immunity to the forces can distort the choice of strategy in counter insurgency operations.
- Reduce professionalism: Second, wider immunity can often reduce rather than increase the professionalism of the forces.
- Against federalism: Third, we are constantly in the vicious circle that leads to central dominance in a way that undermines both Indian federalism and operational efficiency.
Powers and limits under AFSPA
- The Act grants extraordinarily sweeping powers to the armed forces of search, seizure, arrest, the right to shoot to kill.
- No blanket immunity: It is true that AFSPA does not grant blanket immunity.
- The SC guidelines: The Supreme Court laid down guidelines for the use of AFSPA in 1997; and in principle, unprofessional conduct, crimes and atrocities can still be prosecuted.
- But this will run into two difficulties.
- Lack of accountability mechanism: As the Jeevan Reddy Committee that advocated the repeal of AFSPA pointed out, the accountability mechanisms internal to AFSPA have not worked.
- In 2017, the Supreme Court ordered a probe into 1,528 extra-judicial killings in Manipur.
- At the least, this order seemed to suggest the problems with AFSPA were systemic.
- But there have apparently been no hearings in this case for three years.
- Lack of human empathy: At the heart of AFSPA is a profound mutilation of human empathy.
- Our discourse is a rather abstract one, balancing concepts of human rights and national security.
Conclusion
It is high time that all parties come together to repeal AFSPA. It will also be in the fitness of things if all parties got together to acknowledge the trauma in Nagaland and elsewhere. This will strengthen, not weaken, the comatose Indian constitutional project.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now
Note4Students
From UPSC perspective, the following things are important :
Prelims level: Monetary policy corridor
Mains level: Paper 3- Monetary policy normalisation and challenges involved in it
Context
Monetary Policy Committee (MPC) voted to maintain status quo on policy rates, with one member continuing to dissent on the “accommodative” stance of policy.
What is accommodative stance of policy?
Accommodative monetary policy is when central banks expand the money supply to boost the economy. Monetary policies that are considered accommodative include lowering the Federal funds rate. These measures are meant to make money less expensive to borrow and encourage more spending.
Overview of RBI policy measures during Covid-related lockdown
- Cut in policy rates and injection of liquidity: The RBI had moved proactively to cut the repo and reverse repo rate and inject unprecedented amounts of funds into banks and other intermediaries.
- The short-term interest rate at reverse repo level: a combination of the lower reverse repo rate and the large liquidity injection had resulted in a drop in various short-term rates down to (and occasionally below) the reverse repo rate, making it the effective operating rate of monetary policy.
- Gap between repo and reverse repo increased to 65 bps: In addition, both the repo and reverse repo rates had been cut to 4.0 and 3.35 per cent, respectively, with the gap – the “corridor” – between the rates widening from the usual 25 basis points to 65 bps.
Central bank’s role in modern monetary policy
- Determining basic overnight interest rate: A central bank’s main role in modern monetary policy operating procedures is to determine the basic overnight interest rate, deemed to be consistent with prevailing macroeconomic conditions and their economic policy objectives, in balancing the ecosystem for sustained growth together with moderate inflation.
- This is achieved through buying and selling very short-term (predominantly overnight) funds (mainly) from banks to keep a specified operating rate (the weighted average call rate in our case) very close to the policy rate.
Liquidity management: Key pillar of monetary policy normalisation
- Liquidity management: Liquidity management in the extended banking and financial system (which includes non-banking intermediaries like NBFCs, mutual funds and others) will now be the key pillar of normalisation.
- This process is the domain of RBI and not MPC.
- These operations will be conducted within RBI’s liquidity management framework.
- There are two sources of liquidity additions:
- (i) Exogenous: which are largely due to inflows of foreign currency funds and outflows of currency in circulation (cash) from the banking sector.
- (ii) Voluntary or endogenous: which is the result of the creation of base money by RBI through buying and selling of bonds, thereby injecting or extracting rupee funds.
How RBI is managing liquidity surplus?
- Stopped GSAP and OMOs: Post the October review, RBI had stopped buying bonds under the Govt Securities Asset Purchase (GSAP) and done negligible Open Market Operations (OMOs), thereby stopping addition of voluntary liquidity injection into the system, our own version of “tapering”.
- Union government balances with RBI, arising from cash flow mismatches between receipts and expenditures, has hybrid characteristics and also impacts liquidity.
- Use of reverse repo window: RBI has used the reverse repo window to absorb almost all this liquidity surplus from banks.
- Allowed repaying TLRTOs: It has again allowed banks the option to prepay the outstanding borrowings from the Targeted Long Term Repo Operations (TLTROs), thereby potentially extracting another Rs 70,000 crores.
How RBI is managing interest rate in the policy normalisation process
- Increased rates and closed the gap between repo and reverse repo: RBI – post the October review – has gradually guided short-term rates up with a sure hand from near the reverse repo rate to close to the repo rate.
- It has shifted its liquidity absorption operations from the predominant use of fixed rate reverse repos (FRRR) into (largely) 14-day variable rate reverse repo (VRRR) auctions to guide a rise in interest rates.
- Since early October, these rates had steadily moved up in a smooth and orderly fashion up to 3.75-3.9 per cent.
- The VRRR rates moving up have also resulted in various short-term funding interest rates like 90-day Treasury Bills, Commercial Papers (CP) and banks’ Certificates of Deposits (CD) moving up from the reverse repo rate or below in September to 3.5 per cent and higher since December.
- The OMO and GSAP operations have also helped in managing medium- and longer-term interest rates in the yield curve.
Way forward
- There is a likelihood of further additions to exogenous system liquidity.
- Other instruments to absorb surpluses: There might consequently be a need for other instruments to absorb these surpluses apart from VRRR auctions.
- Liquidity surplus of non-banking intermediaries: Managing liquidity surpluses of the non-banking intermediaries, especially mutual funds, will be another challenge since they do not have direct access to VRRR operations.
Consider the question “Since the onset of the Covid-related lockdowns, RBI had moved proactively to cut the repo and reverse repo rate and inject unprecedented amounts of funds into banks and other intermediaries. In this context, what are the challenges in monetary policy normalisation as RBI plans to absorb the excess liquidity and increase the interest rates ?”
Conclusion
The shift to the tightening phase, with hikes in the repo rate, is likely towards the late months of FY23, with shifts “if warranted by changes in the economic outlook”.
UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)
Back2Basics: Monetary Policy Corridor
- The Corridor in monetary policy of the RBI refers to the area between the reverse repo rate and the MSF rate.
- Reverse repo rate will be the lowest of the policy rates whereas Marginal Standing Facility is something like an upper ceiling with a higher rate than the repo rate.
- The MSF rate and reverse repo rate determine the corridor for the daily movement in the weighted average call money rate.
Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024
Attend Now