Monetary Policy Committee Notifications

[op-ed snap] The capital adequacy norms for banks could do with revisionop-ed snap


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Problems with monetary policy transmission


The monetary policy committee of RBI will announce its monetary policy decision. RBI is widely expected to cut rates.

Challenges in Monetary policy transmission

  1. Irrespective of the magnitude of a rate cut, the question of transmission is a big one.
  2. Interest rate cuts take much longer to be passed on.
  3. It is not even clear if interest rates matter in the current uncertain environment. 

Risk weights

  1. In the credit boom years up to 2007, RBI had proactively adjusted risk weights to dissuade banks from lending excessively to certain sectors and businesses.

Why reverse now

  1. According to data published by the Bank for International Settlements (BIS), India’s credit-to-GDP gap has been negative since 2013 and is now running well below trend.
  2. Banks are unwilling to lend and businesses are not keen to borrow either. The caution of banks should not starve creditworthy borrowers.
  3. In the post-2008 phase, regulators around the world have embraced counter-cyclical capital buffers and macroprudential norms to better regulate credit creation while interest rates hit new lows. RBI could use the mechanism of countercyclical capital buffers to ease credit conditions.
  4. Act in concert with owners of banks in enforcing lending discipline.
  5. Central bank prescribing the MCLR-based lending rate as the floor in a liberalized interest rate environment is incongruous.
  6. The government must use the crisis to legally enshrine non-interference in the operational decisions of banks
  7. The government must incentivize banks to augment their assessment of creditworthiness and risk assessment of loans on a continuous basis.
  8. Capitalization support and operational autonomy must be made contingent on skill up-gradation and other quantifiable performance measures.
  9. As economic conditions normalize, countercyclical capital buffers must and will move in the opposite direction.
  10. The bigger question is whether the capital adequacy norms prescribed under Basel III should be made uniformly applicable to all banks in India or only to internationally active banks. It will not only reduce the capitalization burden on the government but will also free up lending capacity.
Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

The making of cyborgs and the challenges aheadop-ed snap


From UPSC perspective, the following things are important :

Prelims level : What neuroprosthetics is

Mains level : Neuro modulation and breakthroughs in health sector


A recent medical trial restored partial sight to six blind people via an implant that transmits video images directly to the brain. The device used was called Orion, which feeds images from a camera directly to the brain.

“Cognitive neuroprosthetics” are devices that directly interface with the brain to improve memory, attention, emotion and much more. 


  1. Current neuromodulation systems need surgical implantation of bulky components with limited battery life.
  2. Batteries impact an intervention’s cost and lifetime, a device’s size and weight, the need for repeat surgeries and problems of tissue-heating and performance compromises. This is due to the relatively high power consumption of the electronics for a given performance requirement.
  3. The National Institutes of Health in the US opines that pacemaker batteries last between 5-15 years, but their average lifespan is 6-7 years; a doctor has to operate again after about 7 years to replace either the battery or the pacemaker itself.


  1. A flexible chip-type implant that harnesses glucose present in the body and converts it into electrical energy that can power a neurological implant.
  2. The problem of battery size can be tackled by reducing the power consumption and operating the electronics near fundamental levels of physics.
  3. Achieving a higher number of channels, better signal-to-noise ratio, and improved flexibility and robustness while working at ultra-low power can significantly lower implant sizes without sacrificing performance.
  4. Ultra-low-power semiconductors to generate chipsets that have been validated in lab and animal trials. 

Future of neuromodulation

  1. Spinal cord stimulation and deep brain stimulation are major target applications.
  2. Neuromodulation is the most lucrative sector in the European neurological device market. In India, it is estimated that about 30 million people suffer from various forms of neurological diseases and the average prevalence rate is as high as 2,394 patients per 100,000 of the population.
  3. Current neuromodulation devices cost between $10,000 and $40,000, putting them out of reach for many Indians.
Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

[op-ed snap] Code Red for labourop-ed snap


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Labor reforms and proposed labor codes


Centre proposed to replace 44 labour laws with four codes.

Problems with the codes

  1. These codes are antithetical to the very idea of statutory protection of labour and dignified standard of living for workers
  2. Original labour laws were enacted after decades of struggle and were meant to ensure certain dignity to the working-class people
  3. Ministry of Labour’s proposal to fix the national minimum floor wage at ₹178 is devoid of any defined criteria or method of estimation.
    1. This may lead to a race to the bottom by States, to attract capital and investments. 
    2. This is being called ‘starvation wage’ as the Ministry’s own committee recommended ₹375 as the minimum.
  4. The four codes exclude over 95% of the workforce employed in informal units and small enterprises, who are in greater need of legal safeguards.
  5. There is no clarity on who constitutes an ‘employer’, an ‘employee’ or an ‘enterprise’, giving the owner greater discretion to interpret the provisions.
  6. To minimise wage bills and compliance requirements, it is proposed that ‘apprentices’ be no longer considered employees.
    1. Evidence indicates that apprentices are made to do jobs of contractual as well as permanent employees.
  7. The code has a provision on “employees below fifteen years of age”, which can be construed as legalisation of child labour. 
  8. The code on wages legitimises and promotes further contractualisation of labour, instead of abolishing it.
  9. Wage code brings back the provision of “recoverable advances”, a system linked to coercive and bonded labour by the Supreme Court. The distressed and vulnerable migrant labourers could be bonded to work through advance payments.
  10. The 8-hour workday shift has been done away with, and multiple provisions of increased overtime have been inserted. 
  11. The code also gives ample alibis to employers to evade bonus payments.
  12. Non-payment of wages will now not be a criminal offence and penalties in case of non-compliance have been reduced.
  13. Code on industrial relations is replete with restrictions on forming or registering unions, calling a strike and seeking legal redressal for workers.

Proposed laws resemble ‘employer codes’ rather than ‘labour laws’.

Internal Security Trends and Incidents

Explained: Amendments to the UAPAExplained


From UPSC perspective, the following things are important :

Prelims level : UAPA Act

Mains level : Curbing terror related activities in India


  • The Unlawful Activities Prevention Amendment (UAPA) Bill is an anti-terror legislation that seeks to designate an individual as a “terrorist”.
  • Both houses of the parliament cleared the changes to the existing law.
  • However Opposition parties and civil liberties lawyers have criticised the Bill, arguing it could be used to target dissent against the government, and infringe on citizens’ civil rights.

Who is a “terrorist” in the UAPA Bill?

  • The words “terror” or “terrorist” are not defined in the UAPA Bill.
  • Section 15 of the UAPA defines a “terrorist act” as any act committed with intent to threaten or likely to threaten the unity, integrity, security, economic security, or sovereignty of India or with intent to strike terror or likely to strike terror in the people or any section of the people in India or in any foreign country.
  • The original Act dealt with “unlawful” acts related to secession; anti-terror provisions were introduced in 2004.

Designating a terrorist

  • The Bill seeks to empower the central government to designate an individual a “terrorist” if they are found committing, preparing for, promoting, or involved in an act of terror.
  • A similar provision already exists in Part 4 and 6 of the legislation for organisations that can be designated as a “terrorist organisation”.

How individuals are declared terrorists?

  • The central government may designate an individual as a terrorist through a notification in the official gazette, and add his name to the schedule supplemented to the UAPA Bill.
  • The government is not required to give an individual an opportunity to be heard before such a designation.
  • At present, in line with the legal presumption of an individual being innocent until proven guilty, an individual who is convicted in a terror case is legally referred to as a terrorist.
  • While those suspected of being involved in terrorist activities are referred to as terror accused.
  • The new Bill does not clarify the standard of proof required to establish that an individual is involved or is likely to be involved in terrorist activities.

What happens when an individual is declared a terrorist?

  • The designation of an individual as a global terrorist by the United Nations is associated with sanctions including travel bans, freezing of assets and an embargo against procuring arms.
  • The UAPA Bill, however, does not provide any such detail.
  • The Bill also does not require the filing of cases or arresting individuals while designating them as terrorists.
  • According to MHA officials, the consequences will be prescribed in the Rules supplemented to the law once the amendment Bill is passed.

Removing the terrorist tag

  • The Bill also seeks to give the central government the power to remove a name from the schedule when an individual makes an application.
  • The procedure for such an application and the process of decision-making will also be decided by the central government.
  • If an application filed by an individual declared a terrorist is rejected by the government, the Bill gives him the right to seek a review within one month after the application is rejected.
  • Under the Bill, the central government will set up the review committee consisting of a chairperson (a retired or sitting judge of a High Court) and three other members.
  • The review committee will be empowered to order the government to delete the name of the individual from the schedule that lists “terrorists”, if it considers the order to be flawed.
  • Apart from these two avenues, the individual can also move the courts challenging the government’s order.

What are the other major changes proposed in the UAPA Bill?

  • The existing UAPA law requires an investigating officer to take prior permission of the Director General of Police of a state for conducting raids, and seizing properties that are suspected to be linked to terrorist activities.
  • The amendment Bill, however, removes this requirement if the investigation is conducted by an officer of the National Investigation Agency (NIA).
  • The investigating officer, under the Bill, only requires sanction from the Director General of NIA.
  • Central agencies such as the Central Bureau of Investigation (CBI) are required to obtain prior permission from the state government since law and order is a state subject under the Constitution.
  • The existing UAPA law specifies that only officers of the rank of Deputy Superintendent or Assistant Commissioner of Police of the NIA shall have the power to investigate offences under the UAPA law.
  • The Bill seeks to allow NIA officers of Inspector rank to carry out investigations.
Pharma Sector – Drug Pricing, NPPA, FDC, Generics, etc.

APIs of drugs to get track-and-trace codesPriority 1


From UPSC perspective, the following things are important :

Prelims level : API

Mains level : Regulating pharma sector

  • The Health Ministry may soon make it mandatory for companies to include codes to track-and-trace key ingredients used to make medicines in India
  • If implemented, the move will potentially be the first step by the government to pinpoint the origin and movement of drugs manufactured here and ensures their authenticity.

QR code for drugs tracking

  • A draft amendment mandating quick response (QR) codes at “each” level of packaging of active pharmaceutical ingredients (APIs), used to give medicines their therapeutic effect is ready and will be notified soon.
  • An API is the basic drug/ingredient in a pharmaceutical drug or pesticide that is biologically active.
  • For a medicine to be effective, the API has to be effective.
  • As a first step to tracking and tracing medicines in the country every API manufactured or imported in India will bear a QR code on its label at each level of packaging.
  • India is currently dependent on China for imports of APIs to make certain essential medicines.

Why such move?

  • The Active Pharmaceutical Ingredient is most important constituent of any drug formulation.
  • The supply chain with respect to its security and integrity in proper storage condition plays very important role to enhance quality supply of APIs.
  • API manufacturers should be held accountable and responsible for the quality and purity of their products.
  • APIs by “various” vendors have been found to be not as per defined specifications with respect to their quality, specifications and purity and in certain cases the desired effects are not obtained.
  • Often APIs are not manufactured at the right premises or such APIs are not manufactured with the required scientific techniques to produce the bio-active substance.

Curbing fake drugs

  • Drug regulators in India on many occasions flagged medicines produced by even large drug makers for failing quality tests.
  • There is lack of clarity on the scale of India’s counterfeit and substandard drug problem.
  • The US, in its Special 301 Report this year, estimated that up to 20 per cent of drugs sold in the Indian market are counterfeit and could represent a serious threat to patient health and safety.
  • However, a nationwide survey conducted by the Indian government between 2014 and 2016 concluded that only around 3 per cent of the medicines here were substandard and only 0.023 per cent spurious or counterfeit.
e-Commerce: The New Boom

Government unveils draft e-com normsMains Only


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Regulating e-commerce in India

  • To protect the interest of online shoppers, the Department of Consumer Affairs has released draft guidelines on e-commerce that state that an e-commerce entity cannot directly or indirectly influence the price of the goods or services.

E-commerce guidelines for consumer protection 2019

  • These are issued as guiding principles for e-commerce business for preventing fraud, unfair trade practices and protecting the legitimate rights and interests of consumers.
  • These guidelines apply to business-to-consumer e-commerce, including goods and services.
  • It added that every e-commerce entity needs to publish the name and contact details of the grievance officer on their website along with the mechanism by which users can lodge their complaints.
  • As per the draft, an e-commerce firm cannot falsely represent themselves as consumers or post reviews about goods and services in their name.
  • The draft guidelines adds that e-commerce firms need to ensure that personally identifiable information of customers is protected, is open for stakeholder comments for 45 days or till September 16, 2019.

Mandatory terms

  • Besides, it proposed to make it mandatory for firms to display terms of contract with the seller relating to return, refund, exchange, warranty/guarantee, delivery/shipment, mode of payments and grievance redressal mechanism to enable consumers to make informed decisions.
  • The draft also proposes that once an e-commerce firm comes to know about any counterfeit product, and if the seller is unable to provide any evidence that the product is genuine, the firm needs to take down the listing and notify the consumers of the same.
Seeds, Pesticides and Mechanization – HYV, Indian Seed Congress, etc.

Why Brazil’s new pesticide rules should worry IndiaPriority 1


From UPSC perspective, the following things are important :

Prelims level : Glyphosate and its hazards

Mains level : Not Much


  • India needs to watch out as Brazil, Latin America’s powerhouse, dilutes its regulations related to pesticide rules.
  • Brazil’s health surveillance agency Anvisa approved new rules which said pesticides in Brazil would be categorised as ‘extremely toxic’ only if they carry a ‘risk of death’.

Dilution of rules

  • The World Health Organization (WHO) classifies pesticides into four classes on the basis of toxicity: extremely dangerous, highly dangerous, moderately dangerous and slightly dangerous.
  • According to the new rules, ‘extremely dangerous and toxic pesticides’ will now be reclassified into lower categories.
  • The new rules are thus contrary to the existing classification model that considers death risk, along with other effects like skin and eye irritations.
  • While a person may not die due to impact on the skin or an eye, these are certainly indicators of hazardous impacts on health.

Brazil, beans and glyphosate

  • Two years ago, Brazil was the world’s top exporter of soyabeans and captured half the market, followed closely by the US.
  • In 2017, Brazil was the third-biggest seller of beans to India, with six per cent of the market share, after Myanmar (60 per cent) and China (10 per cent).
  • This year too, it is on its way to being the leading exporter of soyabeans globally due to the increasing demand from China.
  • But there is one big hitch in all this: pesticides.
  • Brazillian farmers use pesticides in growing all of the country’s major export crops — soyabeans, corn, sugarcane, coffee, rice, beans, and cotton.

Why Brazilian soyabean is harmful?

  • Soyabeans is a major crop that is laden with pesticides.
  • While pesticide use in Brazil has risen three-times faster than production per hectare, each one per cent increase in soyabean production has been accompanied by a 13 per cent increase in pesticide use.
  • It may be noted that glyphosate is used on around 95 per cent of soyabean, corn and cotton harvested in Brazil and there is no readily available substitute.

Hazards of glyphosate

  • The widely-used herbicide has been linked to numerous health problems.
  • It has been classified as a probable human carcinogen by the International Agency for Research on Cancer, an intergovernmental agency under WHO.
  • Russia and many European countries called for the removal of all Brazilian products and called for a general boycott on Brazil until the government changes the policy on pesticides.

What can be done to counter this?

  • Since India does not have any set standards for maximum residual limits for glyphosate, the FSSAI has decided to use the standards set by Codex Alimentarius, a joint committee set up by the WHO and FAO.
  • It has also suggested the testing of imported shipments of these products for compliance with these limits.
  • Even as Brazil is likely to go ahead with its agenda on revising and weakening pesticide rules, the global consumers or the importing nations need to be cautious while granting import clearances to crops from Brazil.