From UPSC perspective, the following things are important :
Mains level: What has the Commission done on the PPAs so far?
Why in the news?
On June 27, the Telangana High Court postponed the hearing on a petition filed by Bharat Rashtra Samiti (BRS) president and former Telangana Chief Minister K Chandrashekar Rao. The petition sought to halt all future proceedings of the Justice (retired) L Narasimha Reddy Commission until Friday.
What is the Narasimha Reddy Commission?
Formation: Appointed by the Congress government of Chief Minister A Revanth Reddy in March 2024.
Purpose: To investigate Power Purchase Agreements (PPAs) made with Chhattisgarh in 2014-15 and construction of power projects at Yadadri and Bhadradri. Allegations of irregularities in the Kaleshwaram irrigation project.
What is Power Purchase Agreements (PPAs)?
Power Purchase Agreements (PPAs) are long-term contracts between electricity producers (such as power plants) and purchasers (such as utilities, governments, or large industrial consumers).
These agreements stipulate the terms under which electricity is to be generated, delivered, and sold over a specified period.
What has the Commission done on the PPAs so far?
Notice Issued: On June 11, the Commission issued a notice to K Chandrashekar Rao (KCR) requesting a response by June 15 regarding the PPAs made during his tenure (2014-2023).
KCR’s Response: KCR accused the Commission of bias and political motivation, requesting Justice Reddy to recuse himself.
Legal Action: Anticipating a personal summons, KCR filed a petition in the Telangana High Court seeking a stay on all proceedings of the Commission.
Energy Minister Notice: G Jagdish Reddy, Energy Minister in KCR’s Cabinet, was also issued a notice to appear before the Commission to provide a statement regarding the PPAs.
Allegations Regarding the Power Plants
Irregularities in Construction: The Narasimha Reddy Commission is investigating allegations of irregularities in the construction of the Bhadradri Thermal Power Plant at Manuguru and the Yadadri Thermal Power Plant at Damaracherla.Both projects were executed by the Telangana State Power Generation Corporation (TG GENCO).
Specific Concerns: The focus is on potential discrepancies and irregularities during the construction process, which may involve issues related to project execution, costs, and adherence to regulatory norms.
Way forward:
Fair and Transparent Investigation: The Narasimha Reddy Commission should ensure a fair and transparent investigation into the allegations concerning Power Purchase Agreements (PPAs) and the construction of power projects.
Collaboration and Accountability: Stakeholders, including former government officials and current authorities involved in the projects under scrutiny, should cooperate fully with the Commission.
From UPSC perspective, the following things are important :
Prelims level: Leader of Opposition in Lok Sabha and Rajya Sabha
Mains level: Significance of the Leader of Opposition
Why in the news?
For a decade, the Leader of Opposition in Lok Sabha remained vacant due to the absence of any party meeting the customary threshold of one-tenth of the House’s strength, now filled by Rae Bareli MP Rahul Gandhi.
Leader of Opposition in the past:
Who can serve as Leader of Opposition in Lok Sabha and Rajya Sabha?
Legal Definition: According to The Salary and Allowances of Leaders of Opposition in Parliament Act, 1977, the Leader of the Opposition is a member of the Lok Sabha or Rajya Sabha who leads the largest party in opposition to the government, recognised by the Speaker (Lok Sabha) or Chairman (Rajya Sabha).
Needed Strength: The leader must lead the party with the greatest numerical strength among the opposition parties in the respective House.
Recognition: The Speaker (Lok Sabha) or Chairman (Rajya Sabha) is mandated to recognize the leader of the largest opposition party as the Leader of the Opposition, irrespective of the party having a minimum threshold of 10% seats in the House.
Significance of the positions and its significant role in Indian Political Democracy
Voice of the Opposition: The Leader of the Opposition serves as the primary spokesperson for the opposition in the House, articulating their views, criticisms, and alternative policies to those of the government.
Role in Committees: The Leader of Opposition plays a crucial role in high-powered committees responsible for appointments to key posts like the Director of CBI, Central Vigilance Commissioner, and others. This ensures a bipartisan approach in crucial appointments.
Ceremonial Role: The Leader of Opposition enjoys ceremonial privileges such as sitting in the front row during important occasions like the President’s Address to Parliament, symbolizing their role as a significant political figure.
Constitutional Checks and Balances: By providing an institutionalized position for the opposition, the Leader of Opposition ensures checks and balances on the ruling party’s power, fostering democratic accountability and oversight.
Precedence and Protocol: In the order of precedence, the Leader of Opposition ranks alongside Union Cabinet Ministers and other senior officials, reflecting their role in the functioning of the parliamentary democracy.
Conclusion: The Leader of Opposition in Lok Sabha and Rajya Sabha, recognized per the 1977 Act, leads the largest opposition party, ensuring a vital role in governance oversight, committee appointments, and parliamentary protocol, crucial for democratic checks and balances.
Mains PYQ:
Q The Indian Constitution has provisions for holding joint sessions of the two houses of the Parliament. Enumerate the occasions when this would normally happen and also the occasions when it cannot, with reasons thereof. (UPSC IAS/2017)
From UPSC perspective, the following things are important :
Prelims level: NAFED, Open Market
Mains level: How Buffer in Chana Helped
Why in the news?
Sales of wheat and chana in the open market have effectively curbed soaring inflation in cereals and pulses.
What is an Open Market?
An open market is an economic system with little to no barriers to free-market activity. An open market is characterized by the absence of tariffs, taxes, licensing requirements, subsidies, unionization, and any other regulations or practices that interfere with free-market activity. Open markets may have competitive barriers to entry, but never any regulatory barriers to entry.
Present State of Inflation:
Overall CPI Inflation: Stood at 4.75% year-on-year in May, the lowest in 12 months, but food inflation remained elevated at 8.69%.
Cereals and Pulses: Inflation rates were 8.69% for cereals and 17.14% for pulses in May 2024.
Impact of Buffer Stocks: Buffer stocks of wheat and chana moderated inflation by ensuring sufficient supply during periods of price volatility.
How Buffer in Gram(Chana) Helped:
NAFED Procurements: Procured large quantities of chana during surplus years at MSP, preventing prices from soaring during crop failures.
Distribution: Sold chana through various channels including open market e-auctions and ‘Bharat Dal’ at subsidized rates, stabilizing prices for consumers.
Current Stock Levels: Despite recent sales, NAFED still maintains a buffer stock of 4.01 lakh tonnes of chana as of now.
Significant Role Played by FCI:
Wheat Offloading: FCI offloaded a record 100.88 lakh tonnes of wheat in fiscal 2023-24 through open market sales, stabilizing prices and reducing inflation.
Retail Price Management: Sales under schemes like ‘Bharat Atta’ ensured wheat and cereal inflation was reduced from peak levels earlier in 2023.
Buffer Management: Despite reduced stocks from previous years, FCI’s interventions have been crucial in managing price volatility in essential commodities.
Need to Adopt Buffer Policy and Better Procurement:
Buffer Stock Strategy: Proposal to expand buffer stocks beyond rice, wheat, and select pulses to include oilseeds, vegetables, and even milk powder to mitigate price spikes.
Enhanced Procurement: Advocates for increased procurement during surplus years to build adequate buffer stocks for future market stabilization.
Policy Impact: Buffer stocking can moderate price volatility influenced by climate change-induced agricultural uncertainties, benefiting both consumers and producers.
Way forward:
Enhanced Diversification of Buffer Stocks: There is a need to diversify buffer stocks beyond traditional items like rice and wheat to include a broader range of essential commodities such as oilseeds, vegetables, and milk powder. This expansion would help in better managing price spikes and supply shocks across various sectors.
Strengthened Procurement Mechanisms: Improving procurement strategies during surplus production years is crucial. This involves proactive measures to purchase larger quantities of commodities at minimum support prices (MSPs), ensuring adequate buffer stocks for future market stabilization and price moderation during scarcity periods.
Mains PYQ:
Q Food Security Bill is expected to eliminate hunger and malnutrition in India. Critically discuss various apprehensions in its effective implementation along with the concerns it has generated in WTO. (UPSC IAS/2013)
From UPSC perspective, the following things are important :
Prelims level: Small Savings Schemes
Mains level: Impact of Stable Interest Rates on Small Savings Schemes
Why in the news?
The central government of India is set to announce the interest rates for various small savings schemes, including the Public Provident Fund (PPF), Senior Citizen Savings Scheme (SCSS), National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY), and Post Office Monthly Income Scheme (POMIS), for the July-September 2024 quarter by June 30, 2024.
Current Interest Rates and Expected Changes
Public Provident Fund (PPF)
Current Rate: 7.1%
Expected Rate: Despite the benchmark 10-year bond yield averaging 7.02% from March to May 2024, which would suggest a rate of 7.27% according to the formula, experts believe the government will likely maintain the status quo.
Reason: Factors such as controlled inflation, stable 10-year G-Sec yields, and historical precedence of the government not strictly following the recommended formula indicate a low probability of rate hikes.
2. Senior Citizen Savings Scheme (SCSS)
Current Rate: 8.2%
Expected Rate: Unlikely to see significant changes.
Reason: With a spread of 100 basis points, the SCSS offers a substantial return, and experts predict the government will maintain existing rates to manage fiscal policies effectively.
3. Sukanya Samriddhi Yojana (SSY)
Current Rate: 8.0%
Expected Rate: Expected to remain stable.
Reason: The SSY enjoys a spread of 75 basis points. Given the controlled inflation and fiscal policies, a rate hike is not anticipated.
Factors Influencing Interest Rates
Benchmark Yields: The interest rates for small savings schemes are linked to the yields of 10-year government securities.
Market Conditions: Prevailing market yields and inflation rates play a crucial role in determining these rates.
Government Policy: The central government’s fiscal strategy and policies, such as those outlined in the Union Budget, impact decisions on interest rates.
Impact of Stable Interest Rates on Small Savings Schemes
Investor Sentiment and Returns
PPF: Investors in PPF may feel disappointed due to the stagnation in interest rates despite a slight uptick in benchmark yields. However, PPF still offers tax-free returns under the Exempt-Exempt-Exempt (EEE) status, making it an attractive long-term investment.
SCSS and SSY: Stability in interest rates ensures a predictable income stream for senior citizens and parents of girl children, maintaining their trust in these schemes.
Government Fiscal Management: Maintaining the current interest rates helps the government manage its fiscal deficit more effectively. Higher rates would increase the interest burden on the government, especially for widely subscribed schemes like PPF.
Inflation Control: Stable interest rates reflect the government’s confidence in managing inflation. By not increasing rates, the government signals that it sees inflation as under control, thus aiming to keep borrowing costs stable for both the government and the public.
Market Stability: Consistent interest rates contribute to market stability. Predictable returns on small savings schemes help in the planning of household finances, ensuring steady savings and investments. This stability can also foster overall economic stability by maintaining consumer confidence.
Conclusion: Investors in PPF, SCSS, and SSY should prepare for the possibility that interest rates will remain unchanged for the July-September 2024 quarter. While the formula indicates room for an increase in PPF rates, historical trends and expert opinions suggest that the government may maintain the current rates to balance fiscal control and market stability.
Mains PYQ:
Q Pradhan Mantri Jan-Dhan Yojana (PMJDY) is necessary for bringing the unbanked to the institutional fiancé fold. Do you agree with this for the financial inclusion of the poorer section of the Indian society? Give arguments to justify your opinion. (UPSC IAS/2016)
From UPSC perspective, the following things are important :
Prelims level: Sengol and its symbolic importance
Why in the News?
An opposition parliamentarian has demanded the removal of the Sengol from the Lok Sabha, calling it a symbol of “rajdand/rajtantra (monarchy)”.This demand has become a point of contention between the government and the Opposition.
What is a Sengol?
A sengol (or chenkol) is a royal sceptre symbolizing kingship, righteousness, justice, and authority.
It is a traditional Chola-era symbol of authority and governance, originally from Tamil Nadu.
It is a golden sceptre, richly adorned and crafted with intricate designs, reflecting the grandeur of ancient Tamil culture.
Among the Madurai Nayakas, the sengol was placed before the goddess Meenakshi in the temple and then transferred to the throne room, representing the king’s role as a divine agent.
Significance in the present context:
Accountability and Legitimacy: Just as the Sengol legitimized ancient rulers by holding them accountable to higher moral standards, the institutions and practices in a parliamentary democracy ensure that elected representatives are accountable to the constitution and the people.
Ethical Leadership: Leaders in a democracy are expected to uphold justice, integrity, and the rule of law, much like the dharmic kings of the past.
Symbolic Representation: The Sengol, as a symbol of righteous rule, parallels the symbolic importance of democratic institutions that represent the will and welfare of the people.
1947 Sengol Ceremony Involving Nehru
Government’s Claim: The government claims C Rajagopalachari suggested the ceremony to Nehru.
This claim is debated, as there is little contemporary evidence to support the Sengol being a key symbol of power transfer in 1947.
Lack of Comprehensive Records: There are limited records about the ceremony where Nehru was reportedly handed a sengol by Hindu leaders from Tamil Nadu.
Undocumented: The event is not widely documented, and claims of Lord Mountbatten handing it over ceremonially seem exaggerated.
No Symbolization: Nehru accepted the Sengol as a mark of honor, but it was later placed in a museum, indicating it was not central to the transfer of power.
From UPSC perspective, the following things are important :
Prelims level: Financial Stability Report, FSDC
Why in the News?
The Reserve Bank of India has released the 29th issue of the Financial Stability Report (FSR).
About Financial Stability Report:
The FSR is published biannually by the RBI.
It reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC – headed by the Governor of RBI) on risks to financial stability and the resilience of the financial system.
The Report also discusses issues relating to the development and regulation of the financial sector.
Key Highlights of the FSR
[1] Global Economic Context
Heightened Global Risks: The global economy faces significant challenges, such as:
Geopolitical Tensions: Conflicts or political disagreements between countries that can affect global stability.
Elevated Public Debt: Many countries owe large amounts of money, which can be risky if they struggle to repay it.
Slow Progress in Disinflation: Prices of goods and services are not decreasing quickly, which can affect economic stability.
Resilience: Despite these challenges, the global financial system (how money moves around the world) remains strong and stable.
[2] Indian Economy and Financial System
Robust and Resilient: India’s economy and financial system are strong and able to handle shocks or problems.
Banking Sector Support: Banks and financial institutions (like insurance companies) are in good health and are lending money to support economic activities.
[3] Financial Metrics for Scheduled Commercial Banks (SCBs)
Capital Ratios:
Capital to Risk-Weighted Assets Ratio (CRAR): This is a measure of a bank’s financial strength. A CRAR of 16.8% means that for every 100 units of risk, the bank has 16.8 units of capital to cover potential losses.
Common Equity Tier 1 (CET1) Ratio: This is a stricter measure of a bank’s core capital. A CET1 ratio of 13.9% means the bank has a strong base of high-quality capital.
Asset Quality:
Gross Non-Performing Assets (GNPA) Ratio: This measures the percentage of a bank’s loans that are not being repaid. A GNPA ratio of 2.8% means that 2.8% of the total loans are in trouble.
Net Non-Performing Assets (NNPA) Ratio: This is similar to GNPA but considers the money the bank has already set aside to cover bad loans. An NNPA ratio of 0.6% means that 0.6% of the total loans, after accounting for provisions, are in trouble.
[4] Macro Stress Tests for Credit Risk
Stress Scenarios and Projections:
Baseline Scenario: Under normal conditions, banks are expected to have a CRAR of 16.1% by March 2025.
Medium Stress Scenario: Under moderate stress, banks are expected to have a CRAR of 14.4% by March 2025.
Severe Stress Scenario: Under severe stress, banks are expected to have a CRAR of 13.0% by March 2025.
Interpretation: These tests show how banks might perform under different levels of economic stress. They are hypothetical scenarios to ensure banks are prepared for tough times.
[5] Health of Non-Banking Financial Companies (NBFCs)
CRAR: NBFCs have a CRAR of 26.6%, indicating they are financially strong.
GNPA Ratio: NBFCs have a GNPA ratio of 4.0%, meaning 4% of their loans are not being repaid.
Return on Assets (RoA): NBFCs have a RoA of 3.3%, indicating they are making good profits from their assets.
PYQ:
[2016] With reference to ‘Financial Stability and Development Council’, consider the following statements:
1. It is an organ of NITI Aayog.
2. It is headed by the Union Finance Minister.
3. It monitors macroprudential supervision of the economy.
Which of the statements given above is/are correct?
From UPSC perspective, the following things are important :
Prelims level: World Drug Report 2024, UNODC
Why in the News?
Global drug users reached 292 million in 2022, marking a 20% increase over the past decade. The report was released by the United Nations Office on Drugs and Crime (UNODC).
About UNODC
Aspect
Details
Global Role
Leader in the fight against illicit drugs and international crime, responsible for implementing the UN’s lead programme on terrorism.
Headquarters
Vienna, Austria.
Establishment
Formed in 1997 through the merger of the United Nations Drug Control Programme and the Centre for International Crime Prevention.
Functions
1. Educate people about the dangers of drug abuse.
2. Strengthens international action against illicit drug production and trafficking.
3. Improves crime prevention and assists with criminal justice reform.
4. Supports States in ratifying and implementing legal instruments against terrorism.
Funding
Relies mainly on voluntary contributions from governments.
India and UNODC
India works closely with UNODC on multiple fronts, including drug control, crime prevention, and anti-terrorism measures.
Cannabis Use: An Overview
According to the WHO, cannabis is a generic term for the various psychoactive preparations of the plant Cannabis sativa. Following are the derived products of Cannabis:
THC: The major psychoactive constituent in cannabis is Delta-9 tetrahydrocannabinol (THC).
Marijuana (Ganja): The Mexican term is frequently used to refer to cannabis leaves or other crude plant material in many countries.
Hashish: Refers to unpollinated female cannabis plants.
Cannabis Oil (Hashish Oil): A concentrate of cannabinoids obtained by solvent extraction of the crude plant material or resin.
International Laws Regulating Cannabis
Commission on Narcotic Drugs (CND): The CND founded in 1946, is the UN agency mandated to control substances under global drug control conventions.
1961 Single Convention on Narcotic Drugs: Cannabis has been on Schedule IV, the most dangerous category, since the convention’s inception.
Despite being on Schedule IV, many jurisdictions have legalized cannabis for medicinal and recreational use.
Over 50 countries now allow medicinal cannabis programs, and recreational use has been legalized in Canada, Uruguay, and 15 US states.
Indian Context: Narcotic Drugs and Psychotropic Substances Act (NDPS), 1985
Illegalization: The Act illegalizes any mixture of charas and ganja, or any drink prepared from them.
Legal Exceptions: The law does not ban the use of seeds and leaves of the cannabis plant if these are not mixed with other parts of the plant. For example, bhang, commonly consumed during the Holi festival, and chutney made from cannabis seeds are not illegal.
PYQ:
[2019] Consider the following statements:
The United Nations Convention against Corruption (UNCAC) has a ‘Protocol against the Smuggling of Migrants by Land, Sea and Air’.
The UNCAC is the ever-first legally binding global anti-corruption instrument.
A highlight of the United Nations Convention against Transnational Organized Crime (UNTOC) is the inclusion of a specific chapter aimed at returning assets to their rightful owners from whom they had been taken illicitly.
The United Nations Office on Drugs and Crime (UNODC) is mandated by its member States to assist in the implementation of both UNCAC and UNTOC.
Which of the statements given above are correct?
(a) 1 and 3 only
(b) 2, 3 and 4 only
(c) 2 and 4 only
(d) 1, 2, 3 and 4
[2018] India’s proximity to the two of the world’s biggest illicit opium-growing states has enhanced her internal security concerns. Explain the linkages between drug trafficking and other illicit activities such as gunrunning, money laundering and human trafficking. What counter-measures should be taken to prevent the same?
From UPSC perspective, the following things are important :
Prelims level: Himalayan Serow; Raimona National Park.
Why in the News?
A mainland serow aka. Himalayan Serow (Capricornis sumatraensis thar) was recorded at 96 metres above mean sea level in Raimona National Park, Assam.
This is the lowest elevation recorded for the species beyond Bhutan, its natural habitat.
About Himalayan Serow
Details
About
Herbivore species.
Also known as Thar.
Resembles a cross between a goat, a donkey, a cow, and a pig.
Recognition
Official state animal of Mizoram.
Distribution
Found at altitudes between 2,000 metres and 4,000 metres (6,500 to 13,000 feet).
Found across the India-Bhutan border in Phibsoo Wildlife Sanctuary and Royal Manas National Park.
Present in eastern, central, and western Himalayas, but not in the Trans Himalayan region.
Conservation Status
IUCN Red List: Vulnerable
CITES: Appendix I
The Wildlife Protection Act, 1972: Schedule I
Back2Basics:Raimona National Park
Raimona National Park is a newly established protected area located in the Bodoland Territorial Region (BTR) of Assam.
It was officially declared a national park in June 2021, becoming the sixth national park in the state of Assam.
It shares its northern boundary with Bhutan, forming part of the transboundary conservation landscape.
It is characterised by dense forests, rivers, and grasslands. The park is part of the greater Manas Biosphere Reserve and serves as an extension of the Manas National Park.
The area is interspersed by the Sankosh River which flows through the park.
Flora and Fauna:
Flora: The park boasts a rich biodiversity with various types of vegetation, including semi-evergreen forests, mixed deciduous forests, and patches of grassland.
Fauna: Hosts a variety of wildlife, including:
Mammals: Asian elephants, tigers, clouded leopards, golden langurs, Indian gaur, and several species of deer.
Birds: Home to numerous bird species, including hornbills, great pied hornbills, and various migratory birds.
Reptiles and Amphibians: The park also supports a diverse range of reptiles and amphibians, adding to its ecological richness.
PYQ:
[2011] The Himalayan Range is very rich in species diversity. Which one among the following is the most appropriate reason for this Phenomenon?
(a) It has a high rainfall that supports luxuriant vegetative growth
(b) It is a confluence of different bio-geographical zones.
(c) Exotic and invasive species have not been introduced in this region.
