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September 2020

Coronavirus – Economic Issues

Case for principles of sound public policy


  • Due to extreme uncertainty, several adventurous prescriptions have been put forth.

Following are 4 unconventional measures and issues with them are discussed here.

1) Shoud we change the Inflation targeting regime?

  • Monetary policy committee (MPC) concluding that elevated inflation has constrained it from easing policy rates further.
  • One way out of this is for the government to relax the inflation-targeting framework.
  • This would involve greater tolerance for higher levels of inflation or by extending the period over which the MPC has to meet its inflation target.
  • Others have suggested shifting from headline to core-inflation as the nominal anchor of monetary policy or incorporating other indicators such as nominal GDP explicitly into the framework.
  • The more extreme ones talk about doing away with the inflation targeting framework altogether.

Why changing the inflation targeting regime will not be helpful

  • There is a strong argument for the MPC to look beyond the current spike in inflation and ease rates further.
  • But disagreements with either the rationale or the stance of the committee members must not be construed as disagreements with the framework.
  • Raising the tolerance threshold may sound appealing now, but it will inject a degree of uncertainty and unpredictability in monetary policy.
  • Considering that anchoring expectations around the inflation target takes time, frequent revisions are unlikely to help stabilise household expectations.
  • While explicitly signalling  will be one of deviating from a rule-based framework.

2) What we shift to Multiple Indicator Structure?

  • Such a move would bring back the situation of the pre-MPC days.
  • In pre-MPC days there was far greater uncertainty over monetary policy.
  • In pre-MPC days there was no clarity over the indicator that was dictating the stance of the RBI governor or which indicator would be given preference, and when.
  • Such proposals go against the rationale for shifting to such a framework in the first place — an inflation targeting regime.
  • Inflationg targeting regime is a well-defined anchor, is meant to facilitate greater transparency and accountability from the central bank.

Way forward

  • There must be a concerted attempt to push for more external voices in the MPC.
  • In the UK, a non-voting treasury representative sits with the MPC to discuss policy issues.

3) Should central bank effectively financing the Centre’s capital expenditure on a regular basis?

  •  This is problematic at many levels.
  • First, notwithstanding problems in estimating potential output, monetisation, even in the rarest of rare cases, should be the last resort.
  • Such an arrangement, risks tilting the balance of power in favour of the government.
  • Any government, owing to its short-term political imperatives, is likely to be seduced by the apparent simplicity of this idea.
  • Second, giving a central bank a degree of control over the government’s expenditure priorities is not a prudent approach.
  • Whatever be their policy inclinations and expenditure priorities, elected representatives have to face voters.
  • Why should unelected technocrats be in charge of determining the expenditure priorities of the government?
  • Such proposals blur the lines between fiscal and monetary policy and may lead to what some call the fiscalisation of monetary policy.

4) Should government pledge its shares in companies?

  • This raises questions. Should a sovereign pledge assets to borrow in the local currency?
  • In 1991, India had pledged gold for a foreign currency-denominated loan not a local currency loan.
  • So why the collateral? And what happens if the value of the shares pledged falls below that of the loan?


Some unconventional measures may well be needed at the current juncture. But discarding the principles of sound public policy, though it sounds appealing, could end up doing more harm than good.

Parliament – Sessions, Procedures, Motions, Committees etc

Moving away from parliamentary scrutiny


From UPSC perspective, the following things are important :

Prelims level : Various committees and their roles.

Mains level : Paper 2- Role of parliamentary committees

The article discusses the important role played by the various committees and their significance.

Committee system for legislative scrutiny

  • Over the years, the Indian Parliament has increasingly adopted the committee system as did the other democracies in the world.
  • This helped in housekeeping, to enhance the efficacy of the House to cope with the technical issues confronting it and to feel the public pulse.
  • But the committee approach also helped to guard its turf and keep it abreast to exercise accountability on the government.

Important role played by the committees

  • Committees are the guardians of the autonomy of the House: consider the role of committees of scrutiny and oversight.
  • In the discharge of their mandate, the committee can solicit expert advice and elicit public opinion.
  • Besides the standing committees, the Houses of Parliament set up, from time to time, ad hoc committees to enquire and report on specific subjects which include Select Committees of a House or Joint Select Committees of both the Houses.
  • Departmentally-related Standing Committees (DRSCs)  were envisaged to be the face of Parliament in a set of inter-related departments and ministries.


  • Committees of scrutiny and advice, both standing and ad hoc, have been confined to the margins or left in the lurch in the last few years.
  • While 60% of the Bills in the 14th Lok Sabha and 71% in the 15th Lok Sabha were wetted by the DRSCs concerned, this proportion came down to 27% in the 16th Lok Sabha.
  • The government has shown extreme reluctance to refer Bills to Select Committees of the Houses or Joint Parliamentary Committees.


The government must not forget that the primary role of Parliament is deliberation, discussion and reconsideration, the hallmarks of democratic institutions, and not a platform that endorses decisions already arrived at.

Back2Bascis: Parliamentary Committees

Broadly, they are classified into two categories — standing committees and ad hoc committees.

1) Standing Committees

  • As the name suggests, these committees cover all the ministries and departments of the Government of India.
  • Standing committees are more permanent in nature, and are constituted from time to time in pursuance of the provisions of an Act of Parliament or Rules of Procedure and Conduct of Business in Lok Sabha.
  • The standing committees are further divided into financial committees and departmentally-related standing committees (DRSCs).
  • There are 24 DRSCs in total — 16 from Lok Sabha and 8 from the Rajya Sabha.
  • Financial committees are of three kinds — the estimates committee, the public accounts committee and the committee on public undertakings.

2) Ad hoc committees

  • Ad hoc committees are appointed for a specific purpose and they cease to exist after they finish the task assigned to them and submit a report.
  • These include advisory committees and inquiry committees.
  • Advisory committees include select and joint committees on bills.
  • Inquiry committees are constituted to inquire into a specific issue and report on it.

Human Development Report by UNDP

World Bank’s Human Capital Index 2020


From UPSC perspective, the following things are important :

Prelims level : HCI, HDI

Mains level : Impact of coronovirus outbreak on Human Capital

India has been ranked at the 116th position in the latest edition of the World Bank’s annual Human Capital Index that benchmarks key components of human capital across countries.

Try this PYQ:

Q.As per UN-Habitat’s Global Report on Human Settlements 2009, which one among the following regions has shown the fastest growth rate of urbanization in the last three decades?

(a) Asia

(b) Europe

(c) Latin America and Caribbean

(d) North America

Highlights of the 2020 rankings

  • The 2020 Human Capital Index update includes health and education data for 174 countries — covering 98 per cent of the world’s population — up to March 2020.
  • It provides a pre-pandemic baseline on the health and education of children, with the biggest strides made in low-income countries.

Impact of the pandemic

  • The analysis shows that pre-pandemic, most countries had made steady progress in building the human capital of children, with the biggest strides made in low-income countries.
  • The pandemic puts at risk the decade’s progress in building human capital, including the improvements in health, survival rates, school enrollment, and reduced stunting.
  • The economic impact of the pandemic has been particularly deep for women and for the most disadvantaged families, leaving many vulnerable to food insecurity and poverty.
  • Due to the pandemic’s impact, most children — more than 1 billion — have been out of school and could lose out, on average, half a year of schooling, adjusted for learning, translating into considerable monetary losses.
  • Data also shows significant disruptions to essential health services for women and children, with many children missing out on crucial vaccinations.

India’s performance

  • India’s score increased to 0.49 from 0.44 in 2018, as per the Human Capital Index report released by the World Bank.
  • Last year, India had raised “serious reservations” over the Human Capital Index, wherein India was ranked 115 out of 157 countries.
  • This year India finds itself at 116th from among 174 countries.

Back2Basics: Human Capital Project

  1. As part of this World Development Report (WDR), the World Bank has launched a Human Capital Project (HCP).
  2. The HCP programme is claimed to be a program of advocacy, measurement, and analytical work to raise awareness and increase demand for interventions to build human capital.
  3. There are three components of HCP:
  • a cross-country human capital measurement metric called the Human Capital Index (HCI),
  • a programme of measurement and research to inform policy action
  • a programme of support for country strategies to accelerate investment in human capital.

Human Capital Index (HCI)

  1. The HCI has been constructed for 157 countries.
  2. It claims to seek to measure the amount of human capital that a child born today can expect to attain by age 18.
  3. The HCI has three components:
    • Survival: as measured by under-5 mortality rates
    • Expected years of Quality-Adjusted School: which combines information on the quantity and quality of education
    • Health environment: Using two proxies of (a) adult survival rates and (b) the rate of stunting for children under age 5. 


  1. UNDP constructs Human Development Index (HDI) for several years.
  2. The HCI uses survival rates and stunting rate instead of life expectancy as a measure of health, and quality-adjusted learning instead of merely years of schooling as a measure of education.
  3. HCI also excludes per capita income whereas the HDI uses it.

Medical Education Governance in India

National Medical Commission


From UPSC perspective, the following things are important :

Prelims level : National Medical Commission

Mains level : Not Much

The National Medical Commission (NMC) has replaced the Medical Council of India (BoG-MCI), as per information released by the Health Ministry.

National Medical Commission

  • National Medical Commission (NMC) is an Indian regulatory body of 33 members which regulates medical education and medical professionals.
  • It replaced the Medical Council of India (MCI) on 25 September 2020.
  • The Commission grants recognition of medical qualifications, gives accreditation to medical schools, grants registration to medical practitioners, and monitors medical practice and assess the medical infrastructure in India.
  • The NMC will have four separate autonomous boards: under-graduate medical education, post-graduate medical education, medical assessment and rating and ethics and medical registration.

It’s legal backing

  • The NITI Aayog had recommended the replacement of MCI with NMC.
  • The decision was approved by most states and after its approval by the Prime Minister and NMC bill was passed by parliament and approved by President on 8 August 2019.
  • National Medical Commission ordinance was brought in to replace Medical Council of India in early 2019 through an ordinance issued in January 2019 by the President of India.
  • The Supreme Court had allowed the Central Government to replace the medical council and with the help of five specialized doctors monitor the medical education system in India, from July 2017.
  • The government dissolved the MCI in 2018 and Indian Medical Council Act, 1956 (102 of 1956) stands repealed.

Urban Transformation – Smart Cities, AMRUT, etc.

[pib] Delhi–Meerut Regional Rapid Transit System (RRTS)


From UPSC perspective, the following things are important :

Prelims level : RRTS train

Mains level : Not Much

The first look of India’s first RRTS train on Delhi-Ghaziabad-Meerut corridor has been unveiled.

Try this PYQ:

Q.Consider the following pairs:

National Highway: Cities connected

  1. NH 4: Chennai and Hyderabad
  2. NH 6: Mumbai and Kolkata
  3. NH 15: Ahmedabad and Jodhpur

Which of the above pairs is/are correctly matched?

(a) 1 and 2 only

(b) 3 only

(c) 1, 2 and 3

(d) None

About the RRTS train

  • The Delhi–Meerut RRTS is an 82.15 km long, under-construction, semi-high speed rail corridor connecting Delhi-Ghaziabad-Meerut.
  • It is one of the three rapid-rail corridors planned under Phase-I of Regional Rapid Transport System (RRTS) project of National Capital Region Transport Corporation (NCRTC).
  • With a maximum speed of 160 km/h (99.42 mph), the distance between Delhi and Meerut will be covered in around 62 min (1.03 h).
  • With radiating stainless steel outer body, these aerodynamic RRTS trains will be lightweight and fully air-conditioned.
  • Each car will have six automatic plug-in type wide doors, three on each side for ease of access and exit.

Foreign Policy Watch: India-Japan

[pib] JIMEX 20


From UPSC perspective, the following things are important :

Prelims level : JIMEX 20

Mains level : Not Much

The 4th edition of India – Japan Maritime bilateral exercise JIMEX will be held in the North Arabian Sea from 26 to 28 September 2020.


  • It is conducted biennially between the Indian Navy and Japanese Maritime Self-Defense Force (JMSDF)
  • This series of exercises was commenced in January 2012 with a special focus on maritime security cooperation.
  • The last edition of JIMEX was conducted in October 2018 off Visakhapatnam, India.
  • JIMEX 20 will showcase a high degree of inter-operability and joint operational skills through the conduct of a multitude of advanced exercises, across the spectrum of maritime operations.
  • Multi-faceted tactical exercises involving weapon firings cross deck helicopter operations and complex surface, anti-submarine and air warfare drills will consolidate coordination developed by the two navies.
  • JIMEX 20 will further enhance the cooperation and mutual confidence between the two navies and fortify the long-standing bond of friendship between the two countries.

History- Important places, persons in news

[pib] Who was Pritilata Waddedar?


From UPSC perspective, the following things are important :

Prelims level : Pritilata Waddedar

Mains level : Not Much

The government of Bangladesh is financing a film on the life of revolutionary freedom fighter Pritilata Waddedar.

Try this PYQ:

Q.The Ghadr (Ghadar) was a –

(a) Revolutionary association of Indians with headquarters at San Francisco.

(b) Nationalist organization operating from Singapore

(c) Militant organization with headquarters at Berlin

(d) Communist movement for Pritilata Waddedar

Pritilata Waddedar (1911-1932)

  • She was a Bengali revolutionary nationalist from the Indian subcontinent who was influential in the Indian independence movement.
  • After completing her education in Chittagong and Dhaka, she attended Bethune College in Kolkata.
  • She graduated in philosophy with distinction and became a school teacher.
  • Pritilata joined a revolutionary group headed by Surya Sen. She is known for leading fifteen revolutionaries in the 1932 armed attack on the Pahartali European Club, during which one person was killed and eleven injured.
  • The revolutionaries torched the club and were later caught by the British police. To avoid arrest, Pritilata consumed cyanide and died.