Note4Students
From UPSC perspective, the following things are important :
Prelims level: UN Human Right Council
Mains level: Paper 2- Crisis in Sri Lanka and contradictions in its polity
Context
Sri Lanka’s ruling Rajapaksa family is facing mounting public anger, calls for resignations and political defections amidst the island’s worst economic crisis in its post-independence history.
Reasons for the crisis
- 1] Overnight switch to organic farming and import ban on fertiliser: There was the decision to ban fertiliser imports and switch overnight to organic farming.
- The decision was reversed after sustained farmer protests but not before damage had already been done to crop yields.
- 2] Then, precious foreign exchange was wasted in propping up the rupee while imposing controls on key imports that led to shortages and price rise.
- 3] For several months, as the crisis deepened with rolling power-cuts and shortages of essentials, the government refused to seek IMF assistance.
- It has now relented on the IMF, but Sri Lanka’s economic distress has been prolonged and deepened by this indecision.
Contradictions in the Sri Lanka’s politics
- While the immediate causes of popular anger are explicable, the crisis also reveals a more enduring contradiction at the foundation of Sri Lanka’s politics.
- Sinhala nationalist-inspired policies: What this crisis shows is that Sinhala nationalist-inspired policies are no longer financially or politically viable.
- Hardline approach toward Tamils: The Rajapaksas first rode to power in September 2005 on the wave of Sinhala nationalist antipathy against the then-ongoing Norwegian-mediated peace process with the LTTE.
- Upon his election as president, Mahinda expanded the military and launched a full-frontal military offensive that ended with the LTTE’s total defeat and destruction in May 2009.
- After the war, instead of seeking a political settlement with the Tamils, Mahinda Rajapaksa unrolled a de-facto militarised siege of the Tamil-speaking areas and population.
- Assertive foreign policy: The hardline approach to the Tamils and their demands was also linked to a new, more assertive foreign policy.
- The government turned away the long-established pattern of alignments with Western states and India.
- Mistrust of India: There is a long-standing mistrust of India amongst Sinhala Buddhist nationalists who see it as the source of historic Tamil invasions.
- The Rajapaksas translated this sentiment into policy, pushing back against Indian attempts to forge closer economic ties and a constitutional settlement of the Tamil question.
- Ties with China: In place of these ties, the Rajapaksas ostentatiously set out to forge new alliances, principally with China.
- The Rajapaksas also bet on a new geo-political optimism.
- They believed that with China’s rise, Sri Lanka’s location on east-west trade lanes would become a prized asset.
- They were confident that in the global competition for power triggered by China’s rise, international actors would be compelled to seek Sri Lanka’s favour for fear of “losing” it to the other side.
- With this geo-political calculus in mind, they assuredly rebuffed Western and Indian demands.
- None of the great powers who were supposed to be competing for Sri Lanka’s favour have stepped up to offer a bailout, although the sums are quite small by global standards.
- The bid for total sovereign autonomy has crash-landed and yet the alternatives are also politically difficult.
More leverage to international actors
- The irony of Sri Lanka’s push for total sovereign autonomy is that it has given international actors more leverage than they had before.
- Going to the IMF will require concessions on human rights and good governance to secure preferential access to European markets.
- At the same time, Indian bilateral assistance has conditionalities on clearing controversial investments.
Way forward
- Push non-reversible changes: International actors who really want to help Sri Lanka should use this leverage to push for tangible and non-reversible changes in the treatment of Tamils and Muslims whatever leadership emerges in Colombo.
- Eemilitarisation and normalisation of relations with the Tamils and Muslims: The crisis can serve as a reality check for the Sinhala nationalist leadership and electorate. The model of economic and political governance they have pursued is unsustainable, and the alternatives must be faced.
- The most pressing of these is the demilitarisation and normalisation of relations with the Tamils and Muslims.
- Sinhala political attention can perhaps then be turned to the other pressing failures of governance that have brought Sri Lanka to this state.
Conclusion
The Rajapaksas may be the principal protagonists of this crisis but the underlying script they have followed is a Sinhala Buddhist one and until Sri Lanka finds a new script it cannot find peace or stability.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: BIMSTEC
Mains level: Paper 2- Key takeaways from BIMSTEC Summit
Context
The celebrations to mark the 25th year of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) have been accompanied by the announcement of several new initiatives.
Important outcome of BIMSTEC Summit
The summit had several important outcomes: Expanding the grouping’s agenda, deepening cooperation between the member countries and planning systematically for consistency and coherence.
1] Finalisation of charter
- The Bay of Bengal Community was launched in 1997. But its charter, finalised last week, was more than two decades in the making.
- The 20-page document adopted at the fifth BIMSTEC Summit articulates the purpose, principles and legal standing of the organisation.
- It also delineates the process to admit new members – this requires the consensus of the members.
- The emphasis on consensus is important, given the sensitivities of the member countries.
- One important provision in the charter is to keep regular meetings on track and provide enough scope to the BIMSTEC Permanent Working Committee to keep the process energised.
2] Development on connectivity issues
- Amongst the important decisions is the one related to the BIMSTEC Master Plan for Transport Connectivity.
- The region requires seamless connectivity through multi-modal channels that improve links within and amongst the member countries.
- These channels should be in sync with the regulatory frameworks of the member countries.
- There are proposals to extend the trilateral highway project between Thailand, Myanmar and India to Laos and Cambodia. Bangladesh, Bhutan and Nepal have also evinced interest in the project.
- Digitisation has enhanced cooperation in customs regulations and facilitated and improved cargo clearance procedures. All this will surely enhance investment linkages and improve regional trade.
3] A systemic approach to streamline the evolution of BIMSTEC.
- Establishing an Eminent Persons’ Group (EPG) for formulating a vision document for the region will help in articulating the aspirations of the collective.
- EPGs have been quite useful in the EU and ASEAN.
- For instance, the ASEAN-India Eminent Persons Group (AIEPG) was constituted in 2005 after the Eighth ASEAN-India Summit.
- Its recommendations still guide the grouping’s work.
- In 2011, the EU constituted an EPG to suggest a roadmap to address the challenges arising from the resurgence of intolerance and discrimination in Europe.
4] MoU for legal assistance and mutual cooperation
- The MoU for legal assistance in criminal matters and additional MoUs for mutual cooperation between diplomatic academics and training institutes would help in creating an ecosystem of deeper knowledge-related cooperation.
- The technology transfer facility proposed in Colombo is likely to augment these efforts.
India’s leading role
- India has promised $1 million to set up a Secretariat in Dhaka.
- India has identified several other areas where it will support the collective.
- Delhi will provide a $3 million grant to the BIMSTEC Centre for Weather and Climate, promote collaboration between industries and start-ups, and launch programmes that will help in the adoption of international standards and norms.
- Agricultural trade analysis: Delhi has also suggested a regional value chain based agricultural trade analysis – this will be conducted by the RIS.
- The Asian Development Bank and the New Delhi-based ICRIER have stewarded awareness programmes on trade facilitating measures in the member countries.
- Support to Sri Lanka and Nepal: The pandemic has created fresh challenges and aggravated old ones in the countries of the region, particularly Sri Lanka and Nepal.
- India’s support to these countries, especially in financial matters, could help in reducing undesirable external intervention in the region.
Way forward
- Need for FTA: The early completion of the regional free trade agreement could provide a fillip to the organisation’s efforts.
- Promote research on cultural and civilisation linkages: Besides economic links, the Bay of Bengal countries share a cultural and civilisational legacy.
- The role of institutions like Nalanda University in promoting research on cultural and civilisational linkages and improving the adoption of sustainable practices would be equally significant.
Conclusion
The collective’s fifth summit that concluded in Colombo showcased member nations’ resolve to facilitate connectivity and security and enhance the prosperity of the region.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: LAF corridor
Mains level: Paper 3- Monetary policy normalisation
Context
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Friday gave a surprise, with a formal start to policy normalisation. This was contrary to the predominant market expectations of a hold.
RBI on the path of policy normalisation
- Focus on target of 4% +/- 2%: While the MPC voted unanimously to remain accommodative, in a change of language, the focus would now be on “withdrawal of accommodation to ensure that (CPI) inflation remains within the target (of 4 per cent +/- 2 per cent) going forward”.
- Remember, the RBI had become a (flexible) inflation-targeting central bank since FY17, whose primary objective is price stability, that is, inflation management.
- The Liquidity Adjustment Facility (LAF) corridor was narrowed back to the conventional 0.25 percentage points from the earlier extraordinary pandemic widening in late March 2020.
- The cap of the erstwhile corridor was the repo rate and the floor was the reverse repo.
- Now, while the repo rate was held at 4.0 per cent and the latter at 3.35 per cent, the floor of the corridor was increased by 0.4 percentage points from 3.35 per cent.
- There was also a change in the monetary policy orientation, of which the stance is one component.
- The priority for monetary policy now is inflation, growth and financial stability, in that order.
Reasons for unexpected tightening of policy
- Inflation concerns: Despite uncertainty over growth impulses and demand concentrated at the upper-income level households, inflation has increasingly emerged as a big concern.
- Given that inflation is likely to average 6.1 per cent in Q4 of FY22, this increases the risk of inflation remaining above the 6 per cent upper target for three consecutive quarters, necessitating an explanation to the government by the MPC.
- One comforting aspect of this scenario is that household inflation expectations remain anchored, with the median of three months to one year ahead expectations (as of March ’22) rising by only 0.1 percentage points from the earlier January readings.
- Stabilisation of demand: On demand conditions, the RBI scaled-down the FY23 real GDP growth projection to 7.2 per cent (from 7.8 per cent), indicating that a combination of continuing supply dislocations, slowing global economy and trade, high prices and financial markets volatility are likely to take a toll.
- One possible reconciliation with modest GDP growth is continuing weakness in services, which is also borne out by channel checks.
- Certainly, continuing high inflation is likely to lead to some demand destruction, which will act as an automatic stabiliser.
- A relatively loose fiscal policy is likely to offset some of this reduced demand, particularly with continuing subsidies to lower-income households.
- Financial stability: This has multiple dimensions – interest and foreign exchange rates, market volatility, banking sector asset stress, and so on.
- An important objective for the RBI is the management of money supply and system liquidity.
- In a rising rate cycle, with a large borrowing programme of the Centre and state governments, interest rates on sovereign bonds are likely to increase without a measure of support from the RBI through Open Market Operations (OMOs).
- This will entail injecting more liquidity into an already large surplus, which might add to inflationary pressures.
- The introduction of the overnight Standing Deposit Facility (SDF) was a significant measure in this context.
- Unlike the reverse repo facility, the RBI will not need to give banks government bonds as collateral against the funds they deposit.
- This is thus a more flexible instrument should a shortage of government bonds in RBI holdings actually transpire under some eventuality, say the need to absorb large capital inflows post a bond index inclusion.
What are the implications?
- Interest rates will begin to increase but, for bank borrowers, this is likely to be a very gradual process.
- For corporates and other wholesale borrowers, who also borrow from bond markets, this increase is likely to be faster as the surplus system liquidity is gradually drained.
- How this is likely to affect demand for credit is uncertain, given the capex push of the government, some revival of private sector investment and likely continuing demand for housing.
Conclusion
This cycle of policy tightening will present a particularly difficult mix of economic and financial trade-offs, but RBI has demonstrated the ability to innovatively use the multiple instruments at its disposal to ensure an orderly transition.
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Back2Basics: Liquidity Adjustment Facility corridor
- Liquidity adjustment facility (LAF) is a monetary policy tool which allows banks to borrow money through repurchase agreements or repos.
- LAF is used to aid banks in adjusting the day to day mismatches in liquidity (frictional liquidity deficit/surplus).
- The liquidity adjustment facility corridor is the excess of repo rate over reverse repo.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FCRA
Mains level: Read the attached story
The Supreme Court upheld amendments introducing restrictions in the Foreign Contribution Regulation Act (FCRA) while holding that no one has a fundamental or absolute right to receive foreign contributions.
What is FCRA?
- The FCRA regulates foreign donations and ensures that such contributions do not adversely affect internal security.
- First enacted in 1976, it was amended in 2010 when a slew of new measures was adopted to regulate foreign donations.
- The FCRA is applicable to all associations, groups and NGOs which intend to receive foreign donations.
- It is mandatory for all such NGOs to register themselves under the FCRA.
- The registration is initially valid for five years and it can be renewed subsequently if they comply with all norms.
Why was FCRA enacted?
- The FCRA sought to consolidate the acceptance and utilisation of foreign contribution or foreign hospitality by individuals, associations or companies.
- It sought to prohibit such contributions from being used for activities detrimental to national interest.
What was the recent Amendment?
- The FCRA was amended in September 2020 to introduce some new restrictions.
- The Government says it did so because it found that many recipients were wanting in compliance with provisions relating to filing of annual returns and maintenance of accounts.
- Many did not utilise the funds received for the intended objectives.
- It claimed that the annual inflow as foreign contributions almost doubled between 2010 and 2019.
- The FCRA registration of 19,000 organisations was cancelled and, in some cases, prosecution was also initiated.
How has the law changed?
There are at least three major changes that NGOs find too restrictive.
- Prohibition of fund transfer: An amendment to Section 7 of the Act completely prohibits the transfer of foreign funds received by an organisation to any other individual or association.
- Directed and single bank account: Another amendment mandates that every person (or association) granted a certificate or prior permission to receive overseas funds must open an FCRA bank account in a designated branch of the SBI in New Delhi.
- Utilization of funds: Fund All foreign funds should be received only in this account and none other. However, the recipients are allowed to open another FCRA bank account in any scheduled bank for utilisation.
- Shared information: The designated bank will inform authorities about any foreign remittance with details about its source and the manner in which it was received.
- Aadhaar mandate: In addition, the Government is also authorised to take the Aadhaar numbers of all the key functionaries of any organisation that applies for FCRA registration or for prior approval for receiving foreign funds.
- Cap on administrative expenditure: Another change is that the portion of the receipts allowed as administrative expenditure has been reduced from 50% to 20%.
What is the criticism against these changes?
- Arbitrary restrictions: NGOs questioning the law consider the prohibition on transfer arbitrary and too heavy a restriction.
- Non-sharing of funds: One of its consequences is that recipients cannot fund other organisations. When foreign help is received as material, it becomes impossible to share the aid.
- Irrationality of designated bank accounts: There is no rational link between designating a particular branch of a bank with the objective of preserving national interest.
- Un-ease of operation: Due to Delhi based bank account, it is also inconvenient as the NGOS might be operating elsewhere.
- Illogical narrative: ‘National security’ cannot be cited as a reason without adequate justification as observed by the Supreme Court in Pegasus Case.
What does the Government say?
- Zero tolerance against intervention: The amendments were necessary to prevent foreign state and non-state actors from interfering with the country’s polity and internal matters.
- Diversion of foreign funds: The changes are also needed to prevent malpractices by NGOs and diversion of foreign funds.
- Fund flow monitoring: The provision of having one designated bank for receiving foreign funds is aimed at making it easier to monitor the flow of funds.
- Ease of operation: The Government clarified that there was no need for anyone to come to Delhi to open the account as it can be done remotely.
What did the Supreme Court observed now?
- The apex court reasoned that unbridled inflow of foreign funds may destabilise the sovereignty of the nation.
- The petitioners have argued that the amendments suffered from the “vice of ambiguity, over-breadth or over-governance” and violated their fundamental rights.
- But the court countered that the amendments only provide a strict regulatory framework to moderate the inflow of foreign funds into the country.
- Free and uncontrolled inflow of foreign funds has the potential to impact the socio-economic structure and polity of the country.
- No one can be heard to claim a vested right to accept foreign donations, much less an absolute right, said the verdict.
Supreme Court’s assessment of Foreign Funds
- Philosophically, foreign contribution (donation) is akin to gratifying intoxicant replete with medicinal properties and may work like a nectar.
- However, it serves as a medicine so long as it is consumed (utilised) moderately and discreetly, for serving the larger cause of humanity.
- Otherwise, this artifice has the capability of inflicting pain, suffering and turmoil as being caused by the toxic substance (potent tool) — across the nation.
Way forward
- The court said charity could be found at home. NGOs could look within the country for donors.
- Fundamental rights have to give way in the larger public interest to the need to insulate the democratic polity from the “adverse influence of foreign contributions”.
- The third-world countries may welcome foreign donations, but it is open to a nation, which is committed and enduring to be self-reliant.
- An unregulated inflow of foreign donations would only indicate that the government was incapable of looking after its own affairs and needs of its citizens.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Fortification of food
Mains level: Read the attached story
The Cabinet Committee on Economic Affairs has approved supply of fortified rice in all States and Union Territories (UTs) by 2024 in a phased manner.
What is the news?
- National Food Security Act (NFSA)
- Integrated Child Development Services (ICDS)
- Pradhan Mantri Poshan Shakti Nirman-PM POSHAN [erstwhile Mid-Day Meal Scheme (MDM)] and
- Other Welfare Schemes (OWS)
Phases of implementation
The following three phases are envisaged for full implementation of the initiative:
- Phase-I: Covering ICDS and PM POSHAN in India all over by March, 2022 which is under implementation.
- Phase-II: Phase I above plus TPDS and OWS in all Aspirational and High Burden Districts on stunting (total 291 districts) by March 2023.
- Phase-III: Phase II above plus covering the remaining districts of the country by March 2024.
What is Fortification?
- The Food Safety and Standards Authority of India (FSSAI) has explicitly defined fortification.
- It involves deliberate increasing of the content of essential micronutrients in a food so as to improve the nutritional quality of food and to provide public health benefit with minimal risk to health.
Types of food fortification
Food fortification can also be categorized according to the stage of addition:
- Commercial and industrial fortification (wheat flour, cornmeal, cooking oils)
- Biofortification (breeding crops to increase their nutritional value, which can include both conventional selective breeding, and genetic engineering)
- Home fortification (example: vitamin D drops)
How is fortification done for rice?
- Various technologies are available to add micronutrients to regular rice, such as coating, dusting, and ‘extrusion’.
- The last mentioned involves the production of fortified rice kernels (FRKs) from a mixture using an ‘extruder’ machine.
- It is considered to be the best technology for India.
- The fortified rice kernels are blended with regular rice to produce fortified rice.
How does the extrusion technology to produce FRK work?
- Dry rice flour is mixed with a premix of micronutrients, and water is added to this mixture.
- The mixture is passed through a twin-screw extruder with heating zones, which produces kernels similar in shape and size to rice.
- These kernels are dried, cooled, and packaged for use. FRK has a shelf life of at least 12 months.
- As per guidelines issued by the Ministry of Consumer Affairs, Food and Public Distribution, the shape and size of the fortified rice kernel should “resemble the normal milled rice as closely as possible”.
- According to the guidelines, the length and breadth of the grain should be 5 mm and 2.2 mm respectively.
But why does rice have to be fortified in the first place?
- India has very high levels of malnutrition among women and children.
- According to the Food Ministry, every second woman in the country is anaemic and every third child is stunted.
- Fortification of food is considered to be one of the most suitable methods to combat malnutrition.
- Rice is one of India’s staple foods, consumed by about two-thirds of the population. Per capita rice consumption in India is 6.8 kg per month.
- Therefore, fortifying rice with micronutrients is an option to supplement the diet of the poor.
What are the standards for fortification?
- Under the Ministry’s guidelines, 10 g of FRK must be blended with 1 kg of regular rice.
- According to FSSAI norms, 1 kg of fortified rice will contain the following: iron (28 mg-42.5 mg), folic acid (75-125 microgram), and vitamin B-12 (0.75-1.25 microgram).
- Rice may also be fortified with zinc (10 mg-15 mg), vitamin A (500-750 microgram RE), vitamin B-1 (1 mg-1.5 mg), vitamin B-2 (1.25 mg-1.75 mg), vitamin B-3 (12.5 mg-20 mg) and vitamin B-6 (1.5 mg-2.5 mg) per kg.
Does fortified rice have to be cooked differently?
- The cooking of fortified rice does not require any special procedure.
- The rice needs to be cleaned and washed in the normal way before cooking.
- After cooking, fortified rice retains the same physical properties and micronutrient levels as it had before cooking.
What is India’s capacity for fortification?
- At the time of the PM’s announcement last year, nearly 2,700 rice mills had installed blending units for the production of fortified rice.
- India’s blending capacity now stands at 13.67 lakh tonnes in 14 key states, according to figures provided by the Ministry.
- FRK production had increased rapidly from 7,250 tonnes to 60,000 tonnes within 2 years.
How can a beneficiary distinguish between fortified rice and regular rice?
- Fortified rice will be packed in jute bags with the logo (‘+F’) and the line “Fortified with Iron, Folic Acid, and Vitamin B12”.
Advantages offered
- Health: Fortified staple foods will contain natural or near-natural levels of micro-nutrients, which may not necessarily be the case with supplements.
- Taste: It provides nutrition without any change in the characteristics of food or the course of our meals.
- Nutrition: If consumed on a regular and frequent basis, fortified foods will maintain body stores of nutrients more efficiently and more effectively than will intermittently supplement.
- Economy: The overall costs of fortification are extremely low; the price increase is approximately 1 to 2 percent of the total food value.
- Society: It upholds everyone’s right to have access to safe and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger
Issues with fortified food
- Against nature: Fortification and enrichment upset nature’s packaging. Our body does not absorb individual nutrients added to processed foods as efficiently compared to nutrients naturally occurring.
- Bioavailability: Supplements added to foods are less bioavailable. Bioavailability refers to the proportion of a nutrient your body is able to absorb and use.
- Immunity issues: They lack immune-boosting substances.
- Over-nutrition: Fortified foods and supplements can pose specific risks for people who are taking prescription medications, including decreased absorption of other micro-nutrients, treatment failure, and increased mortality risk.
Back2Basics: Public Distribution System (PDS)
- The PDS is an Indian food Security System established under the Ministry of Consumer Affairs, Food, and Public Distribution.
- PDS evolved as a system of management of scarcity through the distribution of food grains at affordable prices.
- PDS is operated under the joint responsibility of the Central and State Governments.
- The Central Government, through the Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation, and bulk allocation of food grains to the State Governments.
- The operational responsibilities including allocation within the State, identification of eligible families, issue of Ration Cards and supervision of the functioning of FPSs etc., rest with the State Governments.
- Under the PDS, presently the commodities namely wheat, rice, sugar, and kerosene are being allocated to the States/UTs for distribution.
- Some states/UTs also distribute additional items of mass consumption through PDS outlets such as pulses, edible oils, iodized salt, spices, etc.
Mid-Day Meal Scheme
- The Midday Meal Scheme is a school meal program in India designed to better the nutritional standing of school-age children nationwide.
- It is a wholesome freshly-cooked lunch served to children in government and government-aided schools in India.
- It supplies free lunches on working days for children in primary and upper primary classes in government, government-aided, local body, and alternate innovative education centers, Madarsa and Maqtabs.
- The program has undergone many changes since its launch in 1995.
- The Midday Meal Scheme is covered by the National Food Security Act, 2013.
The scheme aims to:
- avoid classroom hunger
- increase school enrolment
- increase school attendance
- improve socialization among castes
- address malnutrition
- empower women through employment
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From UPSC perspective, the following things are important :
Prelims level: Standing Deposit Facility (SDF)
Mains level: Major monetary policy decisions by RBI
The Reserve Bank of India (RBI) introduced the Standing Deposit Facility (SDF), an additional tool for absorbing liquidity, at an interest rate of 3.75 per cent.
What is SDF?
- In 2018, the amended Section 17 of the RBI Act empowered the Reserve Bank to introduce the SDF – an additional tool for absorbing liquidity without any collateral.
- By removing the binding collateral constraint on the RBI, the SDF strengthens the operating framework of monetary policy.
- The SDF is also a financial stability tool in addition to its role in liquidity management.
- The SDF will replace the fixed-rate reverse repo (FRRR) as the floor of the liquidity adjustment facility corridor.
- Both the standing facilities — the MSF (marginal standing facility) and the SDF will be available on all days of the week, throughout the year.
How it will operate?
- The main purpose of SDF is to reduce the excess liquidity of Rs 8.5 lakh crore in the system, and control inflation.
- The SDF rate will be 25 bps below the policy rate (Repo rate), and it will be applicable to overnight deposits at this stage.
- It would, however, retain the flexibility to absorb liquidity of longer tenors as and when the need arises, with appropriate pricing.
- The RBI’s plan is to restore the size of the liquidity surplus in the system to a level consistent with the prevailing stance of monetary policy.
Also read:
What is Reverse Repo Normalization?
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From UPSC perspective, the following things are important :
Prelims level: Guru Nabha Das Ji
Mains level: Bhakti Movement
Punjab government has announced gazetted holiday on the birth anniversary of Guru Nabha Dass, a 16th century saint, taking it out from list of restricted holidays.
Who was Guru Nabha Dass?
- Guru Nabha Dass was born on April 8, 1537 at village Bhadrachalam on the bank of Godavari river in Khammam district, which falls in the present day Telangana.
- He belonged to Mahasha also known as doom or dumna community, which is one of the Schedule Caste communities.
- Since childhood, orphaned Guru Nabha Dass, whose original name was Narayan Dass, had an inclination towards spirituality.
- Two religious gurus — Agar Dass and Keel Dass — who were passing through his village took the orphan child to a temple at Ghalta Dham, which is now main pilgrimage of Nabhadassias, at Jaipur.
- People from this community are also known as Nabhadassias. They are known for making baskets and grain storage containers with bamboo.
His legacy
- Guru Nabha Dass wrote ‘Bhagatmal’ in 1585.
- It has the life history of around 200 saints. He died in 1643.
What is his connection with Punjab?
- Guru Nabha Dass used to visit village Pandori in Gurdaspur district where people of Doom community live.
- Some gurus of the community also used to live there.
What made government announce gazetted holiday now?
- Political parties can’t manage to ignore the sentiments of such a large community.
- The community had been requesting the government to declare April 8 as a gazetted holiday since long.
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From UPSC perspective, the following things are important :
Prelims level: Article 20
Mains level: Paper 2- Right against self-incrimination
Context
The Bill proposes to collect “measurements” of convicted persons, those who are arrested (or detained under preventive detention laws) or those who have executed bonds promising good behaviour.
Dilution of right against self-incrimination
- The Constitution, under Article 20(3), protects an accused from being compelled to give witness against himself.
- This fundamental right has been diluted over the years.
- In 2005, the Code of Criminal Procedure (CrPC) was amended to allow a magistrate to order any person to give their handwriting samples for the purpose of an investigation or proceeding.
- In 2019, the Supreme Court, in Ritesh Sinha v. State of UP, held that such handwriting samples could include voice samples.
- It relied upon its judgment in the Kathi Kalu Oghad case (1962) that held that giving palm impressions or footprints could not be called self-incriminatory because impressions were unchangeable, except in rare cases”.
- Instead, it held that the Constitution bars the compulsory extraction of a statement — oral or written — from the accused, “which makes the case against the accused person at least probable, considered by itself”.
Provisions in the Bill
- While the databasing of convicted persons is not new, the new piece of legislation allows for taking information, including finger-impressions, palm-print impressions, footprint impressions, photographs, iris and retina scan, physical, biological samples and their analysis, behavioural attributes including signatures, handwriting or any other examination referred to in Sections 53, 53A of the CrPC.
- It also mandates the National Crime Records Bureau to store, preserve and destroy the record of measurements at the national level as well as process and share them with any law enforcement agency.
Issues with the Bill
- Right against self-incrimination is unlikely to apply to technologies in use today.
- Wide scope of under new technologies: The logic that was used in 1962 to interpret what would violate the right against self-incrimination is unlikely to apply to technologies in use today.
- The Bill is vaguely worded and the nature of the processing, sharing, and dissemination of data it entails will most certainly involve the use of new and emerging technologies.
- Their application to policing and the criminal justice system has new implications for the right against self-incrimination.
- The compulsory submission of such information could have chilling effects after being subjected to new technologies – in other words, the past of an accused person might be enough to incriminate him.
- Possibility of coercive data collection: The Bill proposes to collect “measurements” of convicted persons, those who are arrested (or detained under preventive detention laws) or those who have executed bonds promising good behaviour.
- Only those arrested for petty offences that are punishable with less than seven years may not be obliged to allow the recording of measurements.
- This rings a warning bell about coercive data collection, especially when seen in the light of the practices used to police oppressed communities.
- For instance, under the Criminal Tribes Act, 1871, many nomadic and semi-nomadic communities were labelled hereditary criminals.
- Despite the Act being repealed in 1952, these denotified tribal (“Vimukta”) communities continue to be treated as criminals by birth through the “Habitual Offenders” provisions in state-level police regulations that allow local police stations to keep records of such persons residing in their area.
- It condemns a section of the country’s population to several cycles of arrest, bail, and acquittal.
- The new piece of legislation could make the practice of history-sheeting, undertaken when a person is merely alleged of a crime, and not convicted, even more coercive.
- Long storage period and no clear process for destroying information: the “measurements” are to be stored at the national level for 75 years, with no clear procedure outlined for destroying the information.
Conclusion
The right against self-incrimination is at the heart of protection against police excess and torture. Record-keeping as mandated by the Bill violates this right. Parliament must make laws that protect against such blatant attacks on fundamental rights and freedoms, rather than enable them.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: UN Human Rights Council
Mains level: Russia's expulsion from UNHRC
Russia’s membership to the Human Rights Council (UNHRC), to which it was elected in 2020, was suspended after the United Nations General Assembly (UNGA) vote.
Why was Russia suspended from UNHRC?
- Russia’s three-year term as member of the Council began on January 1, 2021.
- With membership on the Council comes a responsibility to uphold high human rights standards.
- It is this responsibility that Russia is alleged to have wilfully violated in Ukraine.
India stayed absent. Why?
- India questioned the process by which the move to suspend Russia took place given that it happened before the international probe into the massacre.
- New Delhi’s point is that it should have been brought before the Human Rights Council first, and not the UNGA, sources said.
- This is a signal to the West that due process has not been followed, something that Indian interlocutors can draw Moscow’s attention to.
About UN Human Rights Council
- The UNHRC is an inter-governmental body within the United Nations system, which is responsible for strengthening the promotion and protection of human rights around the world.
- It addresses and makes recommendations on situations of human rights violations, and can discuss all thematic human rights issues and situations.
- The UNHRC replaced the former UN Commission on Human Rights.
- It was created by the UNGA on March 15, 2006, and the body met in its first session from June 19-30, 2006.
Working of the Council
In 2007, the Council adopted an “institution-building package” to set up its procedures and mechanisms. Among these were:
- Mechanism of Universal Periodic Review to assess the human rights situations in all UN Member States.
- It has Advisory Committee that serves as the Council’s think tank providing it with expertise and advice on thematic human rights issues.
- Its Complaint Procedure, allows individuals and organisations to bring human rights violations to the Council’s attention.
- The Council also works with the UN Special Procedures established by the former Commission on Human Rights, consisting of special rapporteurs, special representatives, independent experts etc.
Membership of the Council
- The Council, which meets at the UN Office in Geneva, Switzerland, is made up of 47 UN Member States who are elected by majority vote through a direct and secret ballot at the UNGA.
- The membership of the Council is based on equitable geographical distribution.
- African and Asia-Pacific states have 13 seats each, Latin American and Caribbean states have 8 seats, Western European and other states 7 seats, and Eastern European states 6 seats.
- The members serve for three years and are not eligible for immediate re-election after serving two consecutive terms.
Leadership of the Council
- The Council has a five-person Bureau, consisting of a president and four vice-presidents, each representing one of the five regional groups.
- They serve for a year each, in accordance with the Council’s annual cycle.
- The Human Rights Council President of the 16th Cycle (2022) is Federico Villegas, who is the Permanent Representative of Argentina to the UN and other international organizations in Geneva.
- He was elected president of the Human Rights Council for 2022 in December 2021.
Meetings of the Council
- The Human Rights Council holds no fewer than three regular sessions a year, for a total of at least 10 weeks.
- These sessions take place in March (4 weeks), June (3 weeks) and September (3 weeks).
- The Council met in its latest (49th) regular session from February 28 to April 1, 2022
- If a third of the Member states requests, the Council can decide at any time to hold a special session to address human rights violations and emergencies.
- Under the presidency of Nazhat S Khan of Fiji, the Council held a record five special sessions in 2021 — on Myanmar, the Occupied Palestinian Territory and Israel, Afghanistan, Sudan, and Ethiopia.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Global edible oil crunch
Mains level: Read the attached story
The world’s largest producer and exporter of palm oil, Indonesia, is facing domestic shortages, leading to price controls and export curbs.
What is the news?
- It’s rare for any country that is the largest producer and exporter of a product to experience domestic shortages of the same product.
- Consumers are unable to access or paying through the nose for a commodity in which their country is the preeminent producer and exporter.
What is Oil Palm?
- Palm oil is an edible vegetable oil derived from the mesocarp of the fruit of the oil palms.
- The oil is used in food manufacturing, in beauty products, and as biofuel.
Palm oil production in Indonesia
- Its palm oil production for 2021-22 (October-September) at 45.5 million tonnes (mt).
- That’s almost 60% of the total global output and way ahead of the next bigger producer: Malaysia (18.7 mt).
- It is also the world’s No. 1 exporter of the commodity, at 29 mt, followed by Malaysia (16.22 mt).
Do you know?
14,000 IDR is less than $1 or Rs 74! See the extent of depreciation one currency can undergo!
Have you ever heard of the Zimbabwean hyperinflation of 2009? One literally had to pay a heap of cash to buy a piece of bread!
Why in headlines?
- Indonesia has seen domestic prices of branded cooking oil spiral, from around 14,000 Indonesian rupiah (IDR) to 22,000 IDR per litre between March 2021 and March 2022.
- Much recently, the government imposed a ceiling on retail prices at 14,000 IDR.
- This led to the product disappearing from supermarket shelves, amid reports of hoarding and consumers standing in long queues for hours to get a pack or two.
India’s imports of palm oil (in lakh tonnes)
Plausible factors
(1) Ongoing War
- The possible reason has to do supply disruptions — manmade and natural — in other cooking oils, especially sunflower and soyabean.
- Ukraine and Russia together account for nearly 80% of the global trade in sunflower oil, quite comparable to the 90% share of Indonesia and Malaysia in palm.
- Russia’s invasion of Ukraine has resulted in port closures and exporters avoiding Black Sea shipping routes.
- Sanctions against Russia have further curtailed trade in sunflower oil, the world’s third most exported vegetable oil after palm and soybean.
(2) Diversion for Bio-Fuels
- Another factor is linked to petroleum, more specifically the use of palm oil as a bio-fuel.
- The Indonesian government has, since 2020, made 30% blending of diesel with palm oil mandatory as part of a plan to slash fossil fuel imports.
- Palm oil getting increasingly diverted for bio-diesel is leaving less quantity available, both for the domestic cooking oil and export market.
Impact on India
- India is the world’s biggest vegetable oils importer.
- Out of its annual imports of 14-15 mt, the lion’s share is of palm oil (8-9 mt), followed by soyabean (3-3.5 mt) and sunflower (2.5).
- Indonesia has been India’s top supplier of palm oil, though it was overtaken by Malaysia in 2021-22 (see above table).
- The restrictions on exports, even in the form of levy, take into cognizance Indonesia’s higher population (27.5 crores, against Malaysia’s 3.25 crore) as well as its ambitious biofuel program.
- To that extent, the world – more so, the bigger importer India – will have to get used to lower supplies from Indonesia.
Answer this PYQ from CSP 2019:
Q.Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?
(a) Spices
(b) Fresh fruits
(c) Pulses
(d) Vegetable oils
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Indian Tent Turtles
Mains level: Not Much
Indian tent turtle is now listed in Schedule –I of the Wild Life (Protection) Act, 1972 and is thereby provided the highest degree of protection.
Why in news?
- The Indian tent turtle is threatened due to illegal mining in Narmada River.
- This turtle has also been widely traded as a pet at aquariums.
Indian Tent Turtles
IUCN status: Least Concerned
- The Indian tent turtle (Pangshura tentoria) is a species of turtle in the family Geoemydidae. The species is endemic to India and Bangladesh.
- Its preferred habitats are freshwater rivers and swamps.
- The species is native to India, Nepal and Bangladesh, with three subspecies recorded from the region viz., P. t. tentoria, P. t. circumdata and P. t. flaviventer.
- t. tentoria occurs in peninsular India and is recorded from Orissa, Maharashtra, Andhra Pradesh, Assam and Madhya Pradesh.
- t. circumdata occurs in the western tributaries of Ganga and the rivers of Gujarat. It is found in Rajasthan, Madhya Pradesh, Uttar Pradesh and Gujarat.
- t. flaviventer occurs in the northern tributaries of Ganga and is recorded from Uttar Pradesh, Bihar, West Bengal and Assam.
Back2Basics: Wildlife (Protection) Act, 1972
- WPA provides for the protection of the country’s wild animals, birds and plant species, in order to ensure environmental and ecological security.
- It provides for the protection of a listed species of animals, birds and plants, and also for the establishment of a network of ecologically-important protected areas in the country.
- It provides for various types of protected areas such as Wildlife Sanctuaries, National Parks etc.
There are six schedules provided in the WPA for protection of wildlife species which can be concisely summarized as under:
| Schedule I: |
These species need rigorous protection and therefore, the harshest penalties for violation of the law are for species under this Schedule. |
| Schedule II: |
Animals under this list are accorded high protection. They cannot be hunted except under threat to human life. |
| Schedule III & IV: |
This list is for species that are not endangered. This includes protected species but the penalty for any violation is less compared to the first two schedules. |
| Schedule V: |
This schedule contains animals which can be hunted. |
| Schedule VI: |
This list contains plants that are forbidden from cultivation. |
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- Challenges facing CBI
Context
The Chief Justice of India (CJI), Justice N.V. Ramana, while delivering the annual (and the 19th edition) D.P. Kohli Memorial Talk minced no words in condemning the utter subordination of agencies to the executive and its disastrous consequences for the cause of justice.
Key takeaways
- Resisting the pressure: The CJI called upon investigators to stand up to unethical pressures in order not to betray the trust reposed in them by the public.
- Strong court: We need a strong Supreme Court and equally strong High Courts to keep our investigators on the straight and narrow path.
- Fixed tenure: Earlier, CBI Directors were changed at will.
- Mandatory tenure was meant to insulate the CBI Director from the caprice of the executive.
- This process has since been expanded to include the CJI in the selection panel.
- Strong leadership: The CBI now has some of the brightest Indian Police Service officers in its higher echelons.
- However, it is not enough if the middle-rung supervisors alone are straightforward.
Should there be an umbrella organisation?
- The CJI had proposed an umbrella organisation that will oversee all investigating agencies.
- This idea was meant to avoid having multiple agencies looking into the same set of allegations.
- Apart from its impracticality, such a novel body could generate its own problems — of turf wars and ego clashes.
Way forward
- There is a need to focus on weeding out the dishonest among officers and rewarding those who have shown and proven themselves to be honest and professionally innovative.
Conclusion
There needs to be a strong and virtuous leader who will not only be honest but also stick his neck out to protect his deputies if and when confronted by an unscrupulous political heavyweight.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Millennium Challenge Corporation (MCC)
Mains level: Paper 2-India-Nepal relation
Context
The Nepal Prime Minister, Sher Bahadur Deuba, paid a long-awaited visit to India last week (April 1-3). Sworn in in July 2021, this was his first bilateral visit abroad, in keeping with tradition.
Positive outcomes of the visit
- Among the highlights was the operationalisation of the 35 kilometre cross-border rail link from Jayanagar (Bihar) to Kurtha (Nepal).
- The second project that was inaugurated was the 90 km long 132 kV double circuit transmission line connecting Tila (Solukhumbu) to Mirchaiya (Siraha) close to the Indian border.
- In addition, agreements providing technical cooperation in the railway sector, Nepal’s induction into the International Solar Alliance, and between Indian Oil Corporation and Nepal Oil Corporation on ensuring regular supplies of petroleum products were also signed.
- The Mahakali Treaty covers the Sarada and Tanakpur barrages as well as the 6,700 MW (approximately) Pancheshwar Multipurpose project.
- Both sides have agreed to push for an early finalisation of the detailed project report.
- The joint vision statement on power sector cooperation recognises the opportunities for joint development power generation projects together with cross border transmission linkages and coordination between the national grids; it can provide the momentum.
Issues in India-Nepal relations
- Over the years, a number of differences have emerged between India and Nepal that need attention.
- The relationship took a nosedive in 2015, with India first getting blamed for interfering in the Constitution drafting process and then for an “unofficial blockade” that generated widespread resentment against India.
- Revision of Treaty of Peace and Friendship: As one of the oldest bonds, the 1950 Treaty of Peace and Friendship was originally sought by the Nepali authorities in 1949 to continue the special links they had with British India.
- It provides for an open border and for Nepali nationals to have the right to work in India.
- But today, it is viewed as a sign of an unequal relationship, and an Indian imposition.
- The idea of revising and updating it has found mention in Joint Statements since the mid-1990s.
- Demonetisation is another irritant. In November 2016, India withdrew ₹15.44 trillion of high value (₹1,000 and ₹500) currency notes. Many Nepali nationals who were legally entitled to hold ₹25,000 of
- Indian currency (given that the Nepali rupee is pegged to the Indian rupee) were left high and dry.
- The Nepal Rashtra Bank, which is the central bank, holds ₹7 crore and estimates of public holdings are ₹500 crore.
- After more than five years, it should certainly be possible to resolve this to mutual satisfaction.
- Kalapani boundary issue: These boundaries had been fixed in 1816 by the British, and India inherited the areas over which the British had exercised territorial control in 1947.
- While 98% of the India-Nepal boundary was demarcated, two areas, Susta and Kalapani remained in limbo.
- In November 2019, India issued new maps following the division of the State of Jammu and Kashmir as Union Territories, Jammu and Kashmir and Ladakh.
- Though the new Indian map did not affect the India-Nepal boundary in any material way, a new map of Nepal was endorsed by the legislature through a constitutional amendment.
- While it did not alter the situation on the ground, it soured relations with India and added a new and emotive irritant.
Way forward
- The political narrative has changed in both countries and these issues can no longer be swept under the carpet or subsumed by invoking a ‘special relationship’.
- Part of the success of Mr. Deuba’s visit was that none of the differences was allowed to dominate the visit.
- Yet, to build upon the positive mood, it is necessary these issues be discussed, behind closed doors and at Track 2 and Track 1.5 channels.
Conclusion
The need today is to avoid rhetoric on territorial nationalism and lay the groundwork for quiet dialogue where both sides display sensitivity as they explore what is feasible. India needs to be a sensitive and generous partner for the “neighbourhood first” policy to take root.
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From UPSC perspective, the following things are important :
Prelims level: WMD
Mains level: Nuclear Non-Proliferation
The Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Amendment Bill, 2022 has been unanimously passed in Lok Sabha.
WMD Bill
- The Bill seeks to amend The Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005.
- It aims to provide against the financing of proliferation of weapons of mass destruction and their delivery systems in line with India’s international obligations.
- The 2005 Act prohibited the manufacturing, transport, and transfer of weapons of mass destruction, and their means of delivery.
Need for the Bill
- In recent times, regulations relating to proliferation of weapons of mass destruction and their delivery systems by international organisations have expanded.
- The UNSCs targeted financial sanctions and the recommendations of the Financial Action Task Force have mandated against financing of proliferation of WMD and their their delivery systems.
Weapons of Mass Destruction
- The expression “weapon of mass destruction” (WMD) is usually considered to have been used first by the leader of the Church of England, the Archbishop of Canterbury, in 1937.
- They usually refer to the aerial bombing of civilians in the Basque town of Guernica by German and Italian fascists in support of General Franco during the Spanish Civil War.
- The expression WMD entered the vocabularies of people and countries around the world in the early 2000s after the US under President George W Bush and the UK under PM Tony Blair justified the invasion of Iraq.
- They invaded Iraq on the grounds that the government of Saddam Hussain was hiding these weapons in the country. However, no WMDs were ever found.
What are NBC weapons?
- While there is no single, authoritative definition of a WMD in international law, the expression is usually understood to cover nuclear, biological, and chemical (NBC) weapons.
- WMD can be any nuclear, radiological, chemical, biological, or other device that is intended to harm a large number of people.
India’s 2005 WMD Act defines-
- “Biological Weapons” as “microbial or other biological agents, or toxins…of types and in quantities that have no justification for prophylactic, protective or other peaceful purposes; and weapons, equipment or delivery systems specially designed to use such agents or toxins for hostile purposes or in armed conflict”; and
- “Chemical Weapons” as “toxic chemicals and their precursors” except where used for peaceful, protective, and certain specified military and law enforcement purposes; “munitions and devices specifically designed to cause death or other harm through the toxic properties of those toxic chemicals”; and any equipment specifically designed for use in connection with the employment of these munitions and devices.
Control over use of WMDs
- The use of chemical, biological, and nuclear weapons is regulated by a number of international treaties and agreements.
- Among them are the Geneva Protocol, 1925, that banned the use of chemical and biological weapons; and the Biological Weapons Convention, 1972, and Chemical Weapons Convention, 1992, which put comprehensive bans on the biological and chemical weapons respectively.
- India has signed and ratified both the 1972 and 1992 treaties.
- There are very few non-signatory countries to these treaties, even though several countries have been accused of non-compliance.
- The use and proliferation of nuclear weapons is regulated by treaties such as Nuclear Non-Proliferation Treaty (NPT) and the Comprehensive Test Ban Treaty (CTBT).
Back2Basics:
Nuclear Security Contact Group
- The NSCG was established in 2016.
- The NSCG or “Contact Group” has been established with the aim of facilitating cooperation and sustaining engagement on nuclear security after the conclusion of the Nuclear Security Summit process.
- The Contact Group is tasked with:
- Convening annually on the margins of the General Conference of the International Atomic Energy Agency (IAEA), and, as may be useful, in connection with other related meetings
- Discussing a broad range of nuclear security-related issues, including identifying emerging trends that may require more focused attention
Nuclear Suppliers Group
- NSG is a group of nuclear supplier countries that seeks to contribute to the non-proliferation of nuclear weapons through the implementation of guidelines for nuclear exports and nuclear-related exports.
- The NSG was set up as a response to India’s nuclear tests conducted in 1974.
- The aim of the NSG is to ensure that nuclear trade for peaceful purposes does not contribute to the proliferation of nuclear weapons.
Comprehensive Nuclear-Test-Ban Treaty
- CTBT was negotiated at the Conference on Disarmament in Geneva and adopted by the United Nations General Assembly in 1996.
- The Treaty intends to ban all nuclear explosions – everywhere, by everyone.
- It was opened for signature in 1996 and since then 182 countries have signed the Treaty, most recently Ghana has ratified the treaty in 2011.
Fissile material cut-off treaty
- FMCT is a proposed international agreement that would prohibit the production of the two main components of nuclear weapons: highly-enriched uranium (HEU) and plutonium.
- Discussions on this subject have taken place at the UN Conference on Disarmament (CD), a body of 65 member nations established as the sole multilateral negotiating forum on disarmament.
- The CD operates by consensus and is often stagnant, impeding progress on an FMCT.
- Those nations that joined the nuclear NPT as non-weapon states are already prohibited from producing or acquiring fissile material for weapons.
- An FMCT would provide new restrictions for the five recognized nuclear weapon states (NWS—United States, Russia, United Kingdom, France, and China), and for the four nations that are not NPT members (Israel, India, Pakistan, and North Korea).
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Bank merger and nationalization
Mains level: Banking sector reforms
Mortgage lender HDFC Ltd. and India’s largest private sector bank HDFC Bank on Monday announced a mega-merger.
Impact of the move
- Under the terms of the deal, which is one of the biggest in the Indian financial sector, HDFC Bank will be 100% owned by public shareholders.
- Existing shareholders of HDFC Ltd. will own 41% stake in HDFC Bank.
- Post-merger HDFC Ltd. will no longer be a separate mortgage lender, it will get folded into the bank.
What are the terms of the merger?
- The merger has to go through a series of regulatory approvals.
- It has to get approval from the shareholders of both companies.
- At this moment what has been announced by the two entities is that its an all-share deal, so there’s no cash transaction involved.
- The terms of the share swap are such that shareholders of HDFC Ltd. will receive 42 shares of HDFC Bank for every 25 shares they hold in HDFC Ltd.
What happens to existing customers and employees?
- As far as customers are concerned, HDFC Ltd.’s customers will become the bank’s customers as well.
- As for employees, HDFC Bank is planning to absorb and retain all the employees.
- Neither of the entities are very heavy on employee numbers and have been fairly conservative in their employee sizes.
What is the rationale behind this merger?
- HDFC have largely had a fairly conservative lending culture, both reasonably customer-friendly, customer-centric, culturally, there wouldn’t be a big challenge.
- The evolution of the regulatory framework for the NBFC (non-banking financial company) industry has been gradually moving closer, to harmonise with the banking sector’s regulatory framework.
- Earlier, NBFCs had a fairly different and a far more loose sort of framework for lending and deposits.
- This led to issues in the industry with some NBFCs struggling and going under or being taken over by others.
- As Basel III norms for capital adequacy are in place, the NPA (non-performing asset) book is very closely monitored.
What is in it for HDFC Ltd. and HDFC Bank?
- Post-merger, the mortgage lender, HDFC Ltd., gets access to HDFC Bank’s CASA (current and savings accounts) deposits, which are lower cost funds.
- For the mortgage lending business, the capital cost will come down. As the capital cost comes down, automatically it will have the ability to lend at a finer rate.
- For HDFC Bank, every home loan customer can be tapped to become a bank customer.
Impacts of the deal
- It’s possible that we might see more NBFCs seeking to merge with banks.
- There is already talk of the number of banks coming down.
- So in some ways, this merger may be a precursor to what is going to happen in the state-run banking space, where the government has said it is going to reduce the number of public sector banks.
Back2Basics: Basel Accords
- They refer to the banking supervision Accords (recommendations on banking regulations)—Basel I, Basel II and Basel III—issued by the Basel Committee on Banking Supervision (BCBS).
- They are called the Basel Accords as the BCBS maintains its secretariat at the Bank for International Settlements in Basel, Switzerland and the committee normally meets there.
- These are a set of recommendations for regulations in the banking industry.
- India has accepted Basel accords for the banking system.
Let’s revise them:
[1] Basel I
- In 1988, BCBS introduced capital measurement system called Basel capital accord, also called as Basel 1.
- It focused almost entirely on credit risk. It defined capital and structure of risk weights for banks.
- The minimum capital requirement was fixed at 8% of risk-weighted assets (RWA).
- RWA means assets with different risk profiles.
- For example, an asset backed by collateral would carry lesser risks as compared to personal loans, which have no collateral. India adopted Basel 1 guidelines in 1999.
[2] Basel II
- In June ’04, Basel II guidelines were published by BCBS, which were considered to be the refined and reformed versions of Basel I accord.
- The guidelines were based on three parameters, which the committee calls it as pillars:
- Capital Adequacy Requirements: Banks should maintain a minimum capital adequacy requirement of 8% of risk assets.
- Supervisory Review: According to this, banks were needed to develop and use better risk management techniques in monitoring and managing all the three types of risks that a bank faces, viz. credit, market and operational risks.
- Market Discipline: This need increased disclosure requirements. Banks need to mandatorily disclose their CAR, risk exposure, etc to the central bank. Basel II norms in India and overseas are yet to be fully implemented.
[3] Basel III
- In 2010, Basel III guidelines were released. These guidelines were introduced in response to the financial crisis of 2008.
- A need was felt to further strengthen the system as banks in the developed economies were under-capitalized, over-leveraged and had a greater reliance on short-term funding.
- Also the quantity and quality of capital under Basel II were deemed insufficient to contain any further risk.
- Basel III norms aim at making most banking activities such as their trading book activities more capital-intensive.
- The guidelines aim to promote a more resilient banking system by focusing on four vital banking parameters viz. capital, leverage, funding and liquidity.
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From UPSC perspective, the following things are important :
Prelims level: Tibetan Parliament-in-Exile (TPiE)
Mains level: India's asylum to Tibetans
The Union government has extended the scheme to provide ₹40 crore grants-in-aid to the Dalai Lama’s Central Tibetan Relief Committee (CTRC) for another five years, up to fiscal year 2025-26.
Do you think that India’s support for the Tibetan cause is the root cause of all irritants in India-China relations?
What is CTRC?
- The Dalai Lama’s Central Tibetan Relief Committee (CTRC) was formed and registered as Charitable Society under Indian Societies Registration Act XXI of 1860.
- It effectively acts as the Relief and Development Wing of Home Department, Central Tibetan Administration.
- All the CTRC activities are carried out with consent and support from Board of Directors and approval from TPiE (Tibetan Parliament in Exile).
Tibetan Parliament-in-Exile (TPiE)
- The Tibetan Parliament-in-Exile (TPiE) has its headquarters in Dharamsala, in the Kangra district of Himachal Pradesh.
- According to the Green Book of the Tibetan government-in-exile, over 1 lakh Tibetans are settled across India.
- The remaining are settled in United States, Australia, Brazil, Canada, Costa Rica, France, Mexico, Mongolia, Germany, United Kingdom, Switzerland and various other countries.
Working of the TPiE
- The Speaker and a Deputy Speaker head the Tibetan Parliament-in-exile.
- It includes two members from each of the four schools of Tibetan Buddhism and the pre-Buddhist Bon religion.
- Other representatives are from the Tibetan Communities in North America and Europe; and from Australasia and Asia (excluding India, Nepal and Bhutan).
- Till 2006, it used to be called as Assembly of Tibetan People’s Deputies (ATPDs) with the chairman as its head and a vice-chairman.
Tibetan Constitution
- The Central Tibetan Administration exists and functions on the basis of the Constitution of the Tibetan government called the ‘The Charter of the Tibetans in Exile’.
- In 1991, The Constitution Redrafting Committee instituted by the Dalai Lama prepared the Charter for Tibetans in exile. The Dalai Lama approved it on June 28, 1991.
- In 2001, fundamental changes happened with the amendment of the Charter that facilitated the direct election of the Kalon Tripa by the Tibetans in exile.
- The Kalon Tripa is called Sikyong or president of the Central Tibetan Administration.
The Kashag (Cabinet)
- The Kashag (Cabinet) is the Central Tibetan Administration’s highest executive office and comprise seven members.
- It is headed by the Sikyong (political leader) who is directly elected by the exiled Tibetan population.
- Sikyong subsequently nominates his seven Kalons (ministers) and seeks the parliament’s approval. The Kashag’s term is for five years.
A backgrounder: Democracy for Tibet
- The Dalai Lama began democratization soon after he came to India during the 1959 Tibetan National Uprising.
- He reportedly asked Tibetans in exile to choose their representatives through universal adult suffrage, following which polls were held for electing Tibetan Parliamentarians in 1960.
- Democracy for the Tibetans, thus, began in exile.
- The Dalai Lama, however, continued to remain the supreme political leader. On March 14, 2011, he relinquished his political responsibilities, ending a 369-year-old practice.
Is TPiE officially recognized by any country?
- Not exactly, it is not recognised officially by any country, including India.
- But, a number of countries including the USA and European nations deal directly with the Sikyong and other Tibetan leaders through various forums.
- The TPiE claims its democratically-elected character helps it manage Tibetan affairs and raise the Tibetan issue across the world.
- The incumbent Sikyong, Lobsang Sangay, was among the guests who attended the oath-taking ceremony of our PM in 2014, probably a first.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Asian Development Outlook Report, ADB
Mains level: Not Much
The Asian Development Bank (ADB) forecasts has provided some useful insights about India’s GDP growth.
About Asian Development Bank (ADB)
- The ADB is a regional development bank established on 19 December 1966 which is headquartered in Philippines.
- ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.
- The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP).
- The ADB was modelled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with members’ capital subscriptions.
- The president has a term of office lasting five years, and may be re-elected.
- Traditionally, and because Japan is one of the largest shareholders of the bank, the president has always been Japanese.
- ADB is an official United Nations Observer.
Highlights of the ADB Outlook Report 2020
- India’s GDP growth will moderate to 7.5% in 2022-23, from an estimated 8.9% in 2021-22.
- It has factored in the Russia-Ukraine conflict’s implications for India, which would be largely indirect through higher oil prices
- The severity of the COVID-19 pandemic would subside with a rise in vaccination rates.
- Higher public capital spending is expected to improve the efficiency of India’s logistics infrastructure, crowd-in private investment, generate jobs in construction and sustain growth.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- Demand-side strategies to tackle climate change
Context
A paradigm shift in the way we think about climate action has been reported for the first time in the recent IPCC report through a chapter on “demand, services and social aspects of mitigation”.
Demand side strategies and their impact
- The report shows how, through comprehensive demand-side strategies, carbon dioxide and non-carbon GHG emissions globally can be reduced by 40–70 per cent compared to the 2050 emissions projection.
- This can be achieved through reduced food waste, following sustainable healthy dietary choices that acknowledge nutritional needs, adaptive heating and cooling, climate-friendly dressing culture, integration of renewable energy in buildings, shifting to electric light-duty vehicles, and to walking, cycling, shared and public transit, sustainable consumption by intensive use of longer-lived repairable products, compact city design and efficient floor area use of buildings.
- The IPCC report also shows that individuals with high socioeconomic status contribute disproportionately to emissions and have the highest potential for emissions reductions, as citizens, investors, consumers, role models, and professionals.
- Of the 60 actions assessed in this report, on an individual level, the biggest contribution comes from walking and cycling wherever possible and using electricity-powered transport.
Need for systemic changes
- To be effective, these shifts will need to be supported by systemic changes in some areas — for example, land use and urban planning policies to avoid urban sprawl, support for green spaces, reallocation of street spaces for walking and physical exercise, investment in public transport and infrastructure design for active and electric vehicles.
- Electrification and shifts to public transport also bring benefits in terms of enhancing health, employment, and equality.
- By providing user-level access to more efficient energy conversion technologies, the need for primary energy can be reduced by 45 per cent by 2050, compared to 2020.
- Demand-side changes cannot deliver the net-zero goal on their own.
- But this requires investment in and transformation across every sector, along with policies and incentives that encourage people to make low-carbon choices in all aspects of their lives.
- There is huge untapped potential in the near term through changes across transport, industry, buildings, and food that will take away the supply-side uncertainties and make it easier for people to lead low-carbon lifestyles and, at the same time, improve well-being.
Conclusion
The latest IPCC report puts people and their well-being at the centre of climate change mitigation. The messages are from a global perspective but have relevance to the national context of every country.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Article 27
Mains level: Paper 2- Secularism in India
Context
The High Court of Karnataka has not been able to settle the hijab issue. The petition has been filed in the apex court by a Muslim student against the high court judgement.
Political and Constitutional dimensions of the issue
- The issue of the hijab is political as well as constitutional.
- The top court will examine the constitutional aspect and its judgment will hopefully settle the issue.
- But the political dimension of the hijab issue will continue to trouble Indian society for a long time.
- The Indian Constitution provides for freedom of religion and conscience on the one hand and secularism for the governance of the country on the other.
Understanding the freedom of religion under Indian Constitution
- Under the Indian Constitution, there is a separation of religion from the state as in Europe.
- The essence of India’s secularism is that the state has no religion.
- This is clear from Articles 27 and 28 of the Constitution.
- Article 27 says that no tax can be levied for promoting any particular religion.
- In other words, no public revenue is permitted to be spent in favour of any particular religion.
- Article 28 says that no religious instruction shall be given in any educational institutions wholly maintained out of state funds.
- The same Article says that no educational institution recognised or aided by the state shall compel any person to attend religious classes or worship therein.
- Article 25(2)(a) empowers the state to regulate secular activities associated with religious practice.
- Article 15 prohibits any kind of discrimination on the ground of religion.
- Freedom of religion is subject to other fundamental rights: Above all, freedom of religion is made subject to other fundamental rights, apart from the reasonable restrictions on the grounds of public order, morality and health.
- Thus, the freedom of religion under the Constitution does not enjoy the same status as other secular rights such as equality before law, non-discrimination, right to life and liberty, etc.
Why India needs to be secular
- Theocracy will ensure the disintegration of the country.
- 1] India is a multi-religious country where the largest minority is around 200 million.
- The Government of India had notified as many as six minority religions in the country.
- So, a theocratic state with the majority religion as the state religion is an unworkable proposition.
- 2] Complex structure: Another crucial factor which makes a theocratic state impossible in India is the complex, inegalitarian, hierarchical and oppressive social structure of the majority religion.
- 3] There would be no equality: Since a theocratic state based on the religious texts, in the Indian context, would mean a state which would deny equality before law and equal protection of law to the subaltern class and discriminate against them on the basis of caste, it will be inherently unstable.
- This may lead to perennial conflicts and the eventual disintegration of society.
- Therefore, we reach the inevitable conclusion that India, as a nation, can survive only as a secular state where the state has no religion and does not promote any religion.
Conclusion
Secularism was chosen as the foundational principle of the republic to keep the nation united. Enlightened citizens should realise that if secularism is jettisoned, the hard-won national unity will be in peril. It is the patriotic duty of every citizen to strengthen secularism and thus save the republic.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Renke Commission, Idate Commission
Mains level: Undoing the historic injustice to DNTs
A standing committee of Parliament, tabled last week, has criticised the functioning of the development programme for de-notified, nomadic and semi-nomadic tribes.
Who are de-notified, nomadic and semi-nomadic tribes?
- These are communities who are the most vulnerable and deprived.
- Denotified tribes (DNTs) are communities that were ‘notified’ as being ‘born criminal’ during the British regime under a series of laws starting with the Criminal Tribes Act of 1871.
- They mostly belong to the medieval period Banjaras.
- Nomadic and semi-nomadic communities are defined as those who move from one place to another rather than living at one place all the time.
What is the history of deprivation faced by these communities?
- This has a long history, first during colonial rule, and then in independent India.
- These communities are largely politically ‘quiet’ — they do not place their demands concretely before the government for they lack vocal leadership and also lack the patronage of a national leader.
- Many commissions and committees constituted since Independence have referred to the problems of these communities. These include the:
- Criminal Tribes Inquiry Committee, 1947 constituted in the United Provinces (now Uttar Pradesh)
- Ananthasayanam Ayyangar Committee in 1949 (it was based on the report of this committee the Criminal Tribes Act was repealed)
- Kaka Kalelkar Commission (also called first OBC Commission) constituted in 1953
- In 1965, an Advisory Committee constituted for revision of the SC and ST list under the chairmanship of B N Lokur referred to denotified tribes
- The B P Mandal Commission constituted in 1980 also made some recommendations on the issue
Policy measures for DNTs
- A National Commission for De-notified, Nomadic and Semi-Nomadic Tribes (NCDNT) was constituted in 2006 by the then government.
- It was headed by Balkrishna Sidram Renke and submitted its report in June 2008.
- It said that it is an irony that these tribes somehow escaped the attention of our Constitution makers and thus got deprived of the Constitutional support unlike SCs and STs.
- The Renke commission estimated their population at around 10.74 crore based on Census 2001.
- A new Commission constituted in February 2014 to prepare a state-wise list, which submitted its report on January 8, 2018, identified 1,262 communities as de-notified, nomadic and semi-nomadic.
- Much recently, the Minister of Social Justice and Empowerment launched the Scheme for Economic Empowerment of De-notified, Nomadic, and Semi Nomadic Communities (SEED).
Why in news now?
- While a number of these tribes are categorised under SC, ST and OBC, many are not.
- The standing committee report in Parliament has cited a statement by the Secretary, Department of Social Justice and Empowerment, that 269 DNT communities are not covered under any reserved categories.
- These communities are frequently left out because they are less visible and difficult to reach.
What is DWBDNC, and what is its role?
- The DWBDNC stands for the Scheme for welfare of Denotified, Nomadic and Semi Nomadic communities (DWBDNC).
- The commission report submitted in 2018 had recommended the setting of up a permanent commission for these communities.
- But since most DNTs are covered under SC, ST or OBC, the government felt setting up a permanent commission, which would deal with redress of grievances.
- The government therefore set up the DWBDNCs under the Societies Registration Act, 1860 under the aegis of Ministry of Social Justice and Empowerment.
The Idate Commission
- The DWBDNC was constituted on February 21, 2019 under the chairmanship of Bhiku Ramji Idate.
- Also, a committee has been set up by the NITI Aayog to complete the process of identification of the de-notified, nomadic and semi-nomadic communities (DNCs).
- Ethnographic studies of DNCs are being conducted by the Anthropological Survey of India, with a budget of Rs 2.26 crore sanctioned.
- On March 30, 2022 the DoPT issued an advertisement for the recruitment of consultants in the DWBDNC.
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