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  • [Burning Issue] Monetary Policy Of RBI

    [Burning Issue] Monetary Policy Of RBI

    Context

    • Recently, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC)  hiked the repo rate by 35 basis points (bps) to 6.25 per cent with immediate effect.
    • The RBI policy rate is now at its highest level since August 2018 and this is the fifth rate hike by the central bank in this financial year.
    • In this context, this edition of the Burning Issue will talk about the Monetary policy of RBI, the tools used by it and its analysis.

    What is monetary policy?

    • Monetary policy is the macroeconomic policy laid down by the central bank. It involves the management of money supply and interest rate and is the demand side economic policy used by the government of a country to achieve macroeconomic objectives like inflation, consumption, growth and liquidity.
    • Economic statistics such as GDP, the rate of inflation, and industry and sector-specific growth rates influence monetary policy strategy.
    • A central bank may revise the interest rates it charges to loan money to the nation’s banks. As rates rise or fall, financial institutions adjust rates for their customers such as businesses or home buyers.
    • Additionally, it may buy or sell government bonds, target foreign exchange rates, and revise the amount of cash that the banks are required to maintain as reserves.

    Goals of Monetary Policy

    • Control Inflation: Contractionary monetary policy is used to target a high level of inflation and reduce the level of money circulating in the economy.
    • Reduce Unemployment: An expansionary monetary policy decreases unemployment as a higher money supply and attractive interest rates stimulate business activities and expansion of the job market.
    • Manage Exchange Rates: The exchange rates between domestic and foreign currencies can be affected by monetary policy. With an increase in the money supply, the domestic currency becomes cheaper than its foreign exchange.

    Types of Monetary Policy: Expansionary and contractionary

    • Contractionary policy: A contractionary policy increases interest rates and limits the outstanding money supply to slow growth and decrease inflation, where the prices of goods and services in an economy rise and reduce the purchasing power of money.
    • Expansionary policy: During times of slowdown or a recession, an expansionary policy grows economic activity. By lowering interest rates, saving becomes less attractive, and consumer spending and borrowing increase.

    Monetary policy in India and the Role of RBI

    • Aim of Monetary Policy: In India, the monetary policy of the Reserve Bank of India is aimed at managing the quantity of money to meet the requirements of different sectors of the economy and to increase the pace of economic growth.
    • Tools of Monetary Policy: The RBI implements the monetary policy through open market operations, bank rate policy, reserve system, credit control policy, moral persuasion and through many other instruments. Using any of these instruments will lead to changes in the interest rate or the money supply in the economy.
    • Types of Monetary policy: It can be expansionary and contractionary in nature. Increasing the money supply and reducing interest rates indicate an expansionary policy. The reverse of this is a contractionary monetary policy.
    • For instance, liquidity is important for an economy to spur growth. To maintain liquidity, the RBI is dependent on the monetary policy. By purchasing bonds through open market operations, the RBI introduces money into the system and reduces the interest rate.

    Monetary policy tools of RBI

    [A] Quantitative tools

    Bank Rate Policy

    • The bank rate is the minimum rate at which the central bank of a country provides a loan to the commercial bank of the country.
    • Bank rate is also called discount rate because the central bank provides finance to commercial banks by rediscounting bills.
    • The RBI uses bank rate to control credit in the economy.

    Open Market Operations

    • OMO are another important instrument of credit control.
    • OMO means the purchase and sale of securities by the RBI.
    • For instance, in an inflationary scenario, the RBI will start selling government securities, the selling of securities will reduce the money supply from the system (Since the buyer of the securities will pay for them in Rupee, hence currency from the system goes out), reduction in money supply will lead to a reduction in funds with the commercial banks, which further reduce their lending capability. A fall in lending thus contracts credit in the economy.

    Cash Reserve Ratio

    • Banks in India are required to keep certain proportions of their deposits in the form of cash with themselves as reserves.
    • If the legal CRR is 10%, then the bank will have to keep Rs 100 as reserves against the deposit of Rs 1000.

    Liquidity Adjustment Facility

    • LAF is a monetary policy instrument which allows commercial banks and primary dealers to borrow money through repurchase agreements or Repos/reverse repos.
    • LAF is used to aid banks in adjusting day-to-day fluctuations in liquidity.
    • RBI extends LAF facility only to commercial banks (excluding RRBs) and Primary dealers.
    • LAF allowed banks to park their excess money with the RBI in case of excess liquidity or to avail liquidity from the RBI at the time of deficit on an overnight basis against the collateral of government securities.

    Repo and reverse repo

    • Repos or Repurchase Agreements is an instrument which allows banks to borrow money from the RBI to manage short-term needs of liquidity against the selling of government securities with an agreement to repurchase the same government securities at a predetermined date and rate. The rate at which the RBI lends to the banks is called Repo Rate.
    • Reverse Repo is an instrument which allows the RBI to borrow from the banks by lending government securities. The rate at which the Banks lend to the RBI is called Reverse Repo Rate.
    • Repo injects money into the system whereas Reverse Repo takes money out of the system.
    • The RBI increases the Repo Rate during the time of inflation and decreases the Repo Rate during the time of deflation and low growth.

    Marginal Standing Facility

    • MSF is a new scheme announced by the RBI in the year 2011-12.
    • MSF is a penal rate at which banks can borrow money from the RBI over and above what they can borrow from the RBI under the LAF window.
    • MSF is a penal rate and is always fixed at a higher rate than the Repo rate.
    • The MSF would be a penal rate for banks, and the banks can borrow funds by pledging government securities within the limits of the statutory liquidity ratio.
    • The scheme has been introduced by RBI with the main aim of reducing volatility in the overnight lending rates in the inter-bank market and enabling smooth monetary transmission in the financial system.

    Statutory Liquidity Ratio

    • SLR is the percentage of the deposits that the banks have to hold with themselves in highly liquid government securities.
    • SLR is one of the many arrows in the RBI’s monetary policy quiver. These are used, sometimes in isolation, sometimes in combination, to manage the money supply, interest rates and credit availability in the country.
    • The SLR is an important tool of monetary policy, and its primary aim is to ensure that banks always have enough liquidity (cash and cash equivalent securities) to honour depositors’ demands and that they don’t lend away all their funds.

    Bank Base Rate

    • The Base Rate is the minimum interest rate of a bank below which it is not permissible to lend, except in some cases if allowed by the RBI.
    • BR is the minimum interest rate that a bank must charge because below the base rate it is not viable for the bank to lend.
    • The base rate, introduced with effect from 1st July 2011 by the Reserve Bank of India, is the new benchmark rate for lending operations of banks.
    • Thus, all categories of domestic rupee loans should be priced only with reference to the Base Rate.

    [B] Qualitative Measure of the RBI

    Fixing Margin Requirements

    • The margin refers to the “proportion of the loan amount which is not financed by the bank”. Or in other words, it is that part of a loan which a borrower has to raise in order to get finance for his purpose.
    • For example, If the RBI feels that more credit supply should be allocated to the agriculture sector, then it will reduce the margin and even 85-90 per cent loan can be given.

    Consumer Credit Regulation

    • Under this method, consumer credit supply is regulated through hire-purchase and instalment sale of consumer goods. Under this method, the down payment, instalment amount, loan duration, etc., is fixed in advance. This can help in checking credit use and then inflation in a country.

    Publicity

    • This is yet another method of selective credit control. Through it, Central Bank (RBI) publishes various reports stating what is good and what is bad in the system. This published information can help commercial banks to direct credit supply in the desired sectors. Through its weekly and monthly bulletins, the information is made public, and banks can use it for attaining goals of monetary policy.

    Credit Rationing

    • Central Bank fixes credit amount to be granted. Credit is rationed by limiting the amount available for each commercial bank. This method controls even bill rediscounting. For certain purpose, the upper limit of credit can be fixed, and banks are told to stick to this limit. This can help in lowering banks credit exposure to unwanted sectors.

    Moral Suasion

    • It implies pressure exerted by the RBI on the Indian banking system without any strict action for compliance with the rules. It is a suggestion to banks. It helps in restraining credit during inflationary periods. Commercial banks are informed about the expectations of the central bank through monetary policy. Under moral suasion, central banks can issue directives, guidelines and suggestions for commercial banks regarding reducing credit supply for speculative purposes.

    New Monetary Policy Framework: The MPC and Inflation Targeting

    What is Monetary Policy Agreement?

    • In 2015 The Government of India and the Reserve Bank of India signed a Monetary Policy Framework Agreement. The new monetary policy framework was formed following the recommendations of a committee headed by RBI Deputy Governor Urjit Patel.
    • The objective of monetary policy framework is to primarily maintain price stability while keeping in mind the objective of growth.
    • As per the agreement, RBI would set the policy interest rates and would aim to bring inflation below 6 per cent by January 2016 and within 4 per cent with a band of (+/-) 2 per cent for 2016-17 and all subsequent years.
    • The central bank will be deemed to have missed its target if consumer inflation is at more than 6 percent or at less than 2 percent for three consecutive quarters starting in the 2015/16 fiscal year.
    • If the central bank misses the inflation target, it will send a report to the government citing reasons and remedial actions.
    • The central bank will also need to give an estimated time period within which it expects to return to the target level.

    Significance of Monetary Policy Agreement 

    • While the agreement gives a free hand to the RBI Governor to decide on the monetary policy measures to achieve the inflation target, it also requires the RBI to give out to the Central Government a report in case the target is missed for some time. Thus, it is a fine balance between autonomy and accountability.
    • The World over, the Central banks are moving towards an inflation targeting based criteria for managing monetary policy. The MPA is a step in that direction.
    • The MPA will put India into the League of Nations that followed a rule-based monetary policy mechanism.

    Monetary policy committee

    • The monetary policy committee framework will replace the current system where the RBI governor and his internal team have complete control over monetary policy decisions. While a technical advisory committee advises the RBI on monetary policy decisions, the central bank is under no obligation to accept its recommendations.
    • The committee will have six members, with three appointed by the Reserve Bank of India (RBI) and the remaining nominated by an external selection committee. The RBI governor will have the casting vote in case of a tie.
    • According to the Finance Bill, the committee will consist of the RBI governor, the deputy governor in charge of monetary policy and one official nominated by the central bank.
    • The other three members will be appointed by the central government through a search committee.
    • This search committee will comprise the cabinet secretary, the secretary of the Department of Economic Affairs, the RBI governor and three experts in the field of economics or banking as nominated by the central government.
    • The members of the MPC appointed by the search committee shall hold office for a period of four years and shall not be eligible for re-appointment.
    • The idea to set up a monetary policy committee was mooted by an RBI-appointed committee led by deputy governor Urjit Patel in 2014.

    Assessment of the Monetary Policy of RBI

    Achievements

    • The overall requirements of expanding economic activities have been met adequately.
    • In respect of priority sectors, for example, the objective of providing 40 percent of the bank credit has been met.
    • Again, the funding of several important development programmes for the weaker sections of the population has been reasonably satisfactory.
    • Even in respect of the control of inflation, the monetary policy has fared well. Overall, inflation has remained in the desired bracket except in a few instances.

    Failures

    • The most unsatisfactory result has been in respect of the expansion of the money supply. The growth rate of money has been much more than the growth in real products.
    • Another shortcoming lies in the allocation of funds to various areas of sectors. The imbalances in credit allocation are more pronounced when one considers agriculture and small industry on the one hand and the large, organised industry and service sector on the other.
    • Agriculture continues to be dependent upon money lenders to a considerable extent for its credit needs. Very small industries, mostly in the unorganised sector, have virtually no institutional source for funds.
    • Also, there has been criticism that the new monetary policy framework has reduced RBI’s role to just inflation manager with little help from government fiscal policy.
    • Transmission of changes in policy rates is not fairly transferred by commercial banks to consumers. For example, In terms of the marginal cost lending rate (MCLR) by the banks (as per the data released by the RBI), the rate reduction was only 10 bps against the reduction of 250 bps by the RBI.

    Conclusion

    • Thus, monetary policy holds an important role in a country’s growth and development.
    • Till now, the monetary policy has fared well but there is a need to enhance the transmission of changes made to it by RBI to get better outcomes and impacts on the economy.

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  • Need to expand the food safety net

    food

    Context

    • The National Food Security Act (NFSA), 2013, through the Public Distribution System (PDS), provides a crucial safety net for roughly 800 million people. Even critics of the PDS appreciated its services during the COVID-19 lockdown.

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    Background: COVID-19 lockdown and policy gaps in ensuring food security

    • Too many still excluded from the PDS: The humanitarian crisis resulting from the COVID-19 lockdown, made it apparent that too many were still excluded from the PDS.
    • Governments decision: In response to the humanitarian crisis, the Government made one sensible policy decision swiftly. It doubled the entitlements of the 800 million who were already covered by the PDS (from five kilograms per person per month, to 10kg). But that does nothing for those without ration cards.

    National food security Act (NFSA)

    • Aims to provide subsidized food grains: The NFS Act, 2013 aims to provide subsidized food grains to approximately two-thirds of India’s 1.2 billion people.
    • Legal entitlements for existing food security programs: It was signed into law on 12 September 2013, retroactive to 5 July 2013. It converts into legal entitlements for existing food security programmes of the GoI.
    • Integrating various government schemes: It includes the Midday Meal Scheme, Integrated Child Development Services (ICDS) scheme and the Public Distribution System (PDS). The Midday Meal Scheme and the ICDS are universal in nature whereas the PDS will reach about wo-thirds of the population (75% in rural areas and 50% in urban areas).
    • It recognizes maternity entitlement: Pregnant women, lactating mothers, and certain categories of children are eligible for daily free cereals.
    • Key provisions: The NFSA provides a legal right to persons belonging to “eligible households” to receive foodgrains at a subsidised price. It includes rice at Rs 3/kg, wheat at Rs 2/kg and coarse grain at Rs 1/kg under the Targeted Public Distribution System (TPDS). These are called central issue prices (CIPs).

    How Public Distribution System (PDS) is determined?

    • PDS coverage is determined by Section 3(2) of the NFSA 2013.
    • It states that the entitlements of eligible households “shall extend up to seventy-five per cent of the rural population and up to fifty per cent of the urban population.”
    • Section 9 of NFSA required that the total number of persons to be covered “shall be calculated on the basis of the population estimates as per the census of which the relevant figures have been published.”

    food

    What are the exclusion problems?

    • Coverage ratio is too low: The exclusion problem could be because the NFSA coverage ratios were too low to start with, or due to the ‘freeze’ in coverage in absolute terms (around 800 million).
    • Population increase has not been accounted: Between the last Census in 2011 and today, population increase has not been accounted for in determining the number of ration cards. No one could have anticipated that the 2021 Census would be postponed indefinitely. This means that even a decadal update has not happened.
    • Lack of sensitivity to understand the problem: There is no attempt at understanding or addressing the hardships of people who are deprived of the food security net that the PDS provides.
    • Court’s observation and a suggestion: Government inaction led to the matter being taken to the Supreme Court of India in the Problems and Miseries of Migrant Labourers case. The Court agreed that the prayer to increase coverage “seems to be genuine and justified”. It directed the Union of India to “come out with a formula and/or appropriate policy/scheme, if any, so that the benefits under NFSA are not restricted as per the census of 2011 and more and more needy persons/citizens get the benefit under the National Food Security Act”. Going further, the Court said that the Government could consider “projection of population increase” to resolve this issue.
    • Burdening the states: In its response, the Government attempts repeatedly to shift the blame to State governments. But States are responsible for identifying people for PDS ration cards, once they are given the numbers to be covered by the central government.

    Way ahead

    • Several State governments have used their own resources this includes poor States such as Chhattisgarh and Odisha to expand coverage beyond the centrally determined quotas.
    • Robust procurement trends and a comfortable food stocks position are what make an expansion affordable.
    • Adjusting for population increase, as directed by the Supreme Court, will increase coverage by roughly 10% (from 800 million to 900 million).
    • Any sensible policy should have an in-built mechanism for updating coverage annually to account for population increase.

    Conclusion

    • Instead of allowing the Government to delay this any further (the matter has been in Court since 2020), the Supreme Court should be firm, directing the Government to get on with apportioning the additional coverage of roughly 100 million across States, so that the States can start identifying new ration card beneficiaries.

    Mains Question

    Q. What is food security? What is National food security Act? There is number some problems for expanding food security net through PDS. Analyse and suggest way forward.

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  • India-China trade deficit is at $51.5 Bn

    The trade deficit, difference between import and exports, between India and China has touched $51.5 billion during April-October this fiscal.

    Widening deficit

    • The deficit during 2021-22 had jumped to $73.31 billion as compared to $44.03 billion in 2020-21.
    • According to the data, imports during April-October this fiscal stood at $60.27 billion, while exports aggregated at $8.77 billion.
    • The merchandise exports from India to China had increased from $11.93 billion in 2014-15 to $21.26 billion in 2021-22.

    India-China bilateral trade

    • In 2021, annual two-way trade crossed $100 billion for the first time, reaching $125.6 billion, with India’s imports accounting for $97.5 billion, pegging the imbalance at close to $70 billion.
    • This is certainly a healthy deficit compared to the industrial development in both nations.

    A quick backgrounder

    • Trade ties began to boom since the early 2000s.
    • This was driven largely by India’s imports of Chinese machinery and other equipment.
    • It rose up from $3 billion in the year 2000 to $42 billion in 2008, the year China became India’s largest trading partner.

    The Hindi-Chini buy buy

    • A third of machinery and almost two-fifths of organic chemicals that India purchases from the world come from China.
    • Automotive parts and fertilizers are other items where China’s share in India’s import is more than 25 per cent.
    • Several of these products are used by Indian manufacturers in the production of finished goods, thus thoroughly integrating China in India’s manufacturing supply chain.
    • For instance India sources close to 90 per cent of certain mobile phone parts from China.

    India’s export to China

    • Even as an export market, China is a major partner for India.
    • China is the third-largest destination for Indian shipments.
    • At the same time, India only accounts for a little over two percent of China’s total exports, according to the Federation of Indian Export Organisation (FIEO).

    Should we worry about this?

    • Trade deficits/surpluses are just accounting exercises and having a trade deficit against a country doesn’t make the domestic economy weaker or worse off.
    • In this light, India’s trade imbalance with China should not be viewed in isolation.
    • For instance, pharmaceuticals that India exports to the world require ingredients that are imported from China.
    • Chinese imports of Indian seafood are one area that has recently shown robust growth and carries scope to grow in future.

    So, having a trade deficit is good?

    • Of course NOT. Running persistent trade deficits across all countries raises two main issues.
    1. Availability of foreign exchange reserves to “buy” the imports.
    2. Lack of domestic capacity to produce most efficiently.

    Can we ban trade with China?

    Ans. Certainly NOT!

    • It will hurt the Indian poor the most: This is because the poor are more price-sensitive. For instance, if Chinese TVs were replaced by either costlier Indian TVs or less efficient ones, unlike poor, richer Indians may buy the costlier option.
    • It will punish Indian producers and exporters: Several businesses in India import intermediate goods and raw materials, which, in turn, are used to create final goods — both for the domestic Indian market as well as the global market (as Indian exports).
    • Pharma sector could be worst hit: For instance, of the nearly $3.6 billion worth of ingredients that Indian drug-makers import to manufacture several essential medicines, China catered to around 68 percent.
    • Ban will barely hurt China: According to the United Nations Conference on Trade and Development (UNCTAD) data for 2018, 15.3% of India’s imports are from China, and 5.1% of India’s exports go to China.
    • Chinese money funds Indian unicorns: India and China have also become increasingly integrated in recent years. Chinese money, for instance, has penetrated India’s technology sector, with companies like Alibaba and Tencent strategically pumping in billions of dollars into Indian startups such as Zomato, Paytm, Big Basket and Ola.
    • India will lose policy credibility: It has also been suggested that India should renege on existing contracts with China. This can be detrimental to India’s effort to attract foreign investment.

    China is our Frenemy. Here is why.

    • The first thing to understand is that turning a border dispute into a trade war is unlikely to solve the border dispute.
    • Worse, given India and China’s position in both global trades as well as relative to each other, this trade war will hurt India far more than China.
    • Again, these measures will be most poorly timed since the Indian economy is already at its weakest point ever — facing a sharp GDP contraction.

    Way forward

    • In the long term, under the banner of self-reliance, India must develop its domestic capabilities and acquire a higher share of global trade by raising its competitiveness.
    • But no country is completely self-sufficient and that is why trade is such a fantastic idea.
    • For the long run, a more effective strategy needs to be built to provide an ecosystem that addresses the cost disability of Indian manufacturing leading to such imports.

     

     

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  • Singapore Declaration of ILO

    CONTEXT: The 17th Asia-Pacific Regional Meeting of the International Labour Organisation (ILO) set ten-point priorities of national action under the Singapore Declaration.

    Singapore Declaration

    • It seeks to draw attention for the member countries to deal with the issue of dwindling wages of workers, inflation and unemployment.
    • It was adopted by the delegates representing governments, employers and workers’ governments, employers and workers in the regions.
    • Members agreed that social dialogue is essential to address labour market challenges and finding solutions in crisis situations such as the COVID-19 pandemic, natural disasters, and economic uncertainty.

    Key point priorities

    1. Ensure labour protection for all through the promotion of freedom of association
    2. Recognition of the right to collective bargaining, including for workers in vulnerable situations and workers in the informal economy, as enabling rights for decent work
    3. Closing gender gaps, increase women’s labour force participation, promote equal pay for work of equal value, balance work and responsibilities, and promoting women’s leadership.
    4. Develop and implement inclusive labour market programmes and policies that support life transitions and demographic shifts.
    5. Pursue collective and determined efforts to promote and accelerate a smooth and sustained transition from the informal to formal economy
    6. Strengthen governance frameworks and respect for freedom of association for migrant workers
    7. Strengthen the foundation for social and employment protection and resilience
    8. Expanding social protection to all workers, guaranteeing universal access to comprehensive, adequate and sustainable social protection for all

     

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  • ISRO successfully conducts test of Scramjet Engine

    jet

    The ISRO successfully conducted test for credible next-generation air-breathing scramjet engines, in order to launch satellites in a predetermined orbit at a low cost.

    What is a jet engine?

    • A jet engine is a machine that converts energy-rich, liquid fuel into a powerful pushing force called thrust.
    • The thrust from one or more engines pushes a plane forward, forcing air past its scientifically shaped wings to create an upward force called lift that powers it into the sky.

    Ramjet vs. Scramjet Engine

    • Both scramjet and Ramjet are types of jet engines.
    • A ramjet is an air breathing jet engine which is usually associated with supersonic transport.
    • Ramjets can start at supersonic speeds only, so as a result they cannot be started at zero velocity and cannot produce thrust as there is a lack of airspeed.
    • Hence assisted take off flights or rockets are needed to or accelerate it to a supersonic speed from which it starts producing thrust.
    • This makes ramjet engine to be efficient only at supersonic speeds as it can accelerate to speeds of about Mach 6.
    • Ramjet has revolutionized Rocket Propulsion and Missile Technology over the years.

    How different is Scramjet?

    • The Scramjet or the Supersonic Combustion Ramjet is a further complex model and is efficient at hypersonic speeds, usually upwards of Mach 6.
    • They do not have any moving parts to compress the air as the air entering is already at high pressure.
    • Scramjets have a very similar working to that of the ramjet except the fact that combustion also takes place at supersonic speed.
    • This means that the air being compressed does not slow down as it enters the combustion chamber.

     

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  • What is a Trisonic Wind Tunnel?

    tunnel

    The new trisonic wind tunnel at the Vikram Sarabhai Space Centre (VSSC) was inaugurated by conducting the first blow-down test successfully.

    What is a Wind Tunnel?

    • Wind tunnels are large tubes with air moving inside.
    • The tunnels are used to copy the actions of an object in flight.
    • Researchers use wind tunnels to learn more about how an aircraft will fly.
    • Space agencies uses wind tunnels to test scale models of aircraft and spacecraft. Some wind tunnels are big enough to hold full-size versions of vehicles.
    • The wind tunnel moves air around an object, making it seem like the object is really flying.

    How do Wind Tunnels work?

    • Most of the time, powerful fans move air through the tube.
    • The object to be tested is fastened in the tunnel so that it will not move.
    • The object can be a small model of a vehicle. It can be just a piece of a vehicle.
    • It can be a full-size aircraft or spacecraft. It can even be a common object like a tennis ball.
    • Smoke or dye can be placed in the air and can be seen as it moves. Threads can be attached to the object to show how the air is moving.
    • Special instruments are often used to measure the force of the air on the object.

    About Trisonic Wind Tunnel at VSCC

    • ‘Trisonic’ refers to the tunnel’s capability to test in three speed regimes—below the speed of sound (subsonic), at the speed of sound (transonic), and above the speed of sound (supersonic).
    • Its parts include air storage vessels, a settling chamber where the airflow is ‘smoothened’ out, and nozzles for releasing the air into the test section.
    • It is about 160 metres long and measures 5.4 metres at its widest part.
    • In a ‘blow down test’, stored gases are released and blown through the tunnel’s test section, simulating flight conditions.
    • The tunnel can simulate flight conditions from 0.2 times the speed of sound (68 metres per second) to four times the speed of sound (1,360 metres per second), according to the space agency.
    • Commissioned in 2017, this tunnel can simulate flow speeds up to Mach 12.

     

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  • Three Himalayan medicinal plants enter IUCN Red List

    Three medicinal plant species found in the Himalayas have made it to IUCN Red List of Threatened Species following a recent assessment.

    Species assessed-

    1. Meizotropis pellita : ‘Critically Endangered’
    2. Fritilloria cirrhosa : ‘Vulnerable’
    3. Dactylorhiza hatagirea : ‘Endangered’

    (1) Meizotropis pellita

    iucn

    • Commonly known as Patwa, is a perennial shrub with restricted distribution that is endemic to Uttarakhand.
    • The species is listed as ‘critically endangered’ based on its limited area of occupancy (less than 10 sq. km)
    • The species is threatened by deforestation, habitat fragmentation and forest fires.
    • The essential oil extracted from the leaves of the species possesses strong antioxidants and can be a promising natural substitute for synthetic antioxidants in pharmaceutical industries.

    (2) Fritillaria cirrhosa

    iucn

    • Also called, Himalayan fritillary, it is a perennial bulbous herb.
    • It is reasonable to conclude a decline of at least 30% of its population over the assessment period (22 to 26 years).
    • Considering the rate of decline, long generation length, poor germination potential, high trade value, extensive harvesting pressure and illegal trade, the species is listed as ‘vulnerable’.
    • In China, the species is used for the treatment of bronchial disorders and pneumonia.
    • The plant is also a strong cough suppressant and source of expectorant drugs in traditional Chinese medicine.

    (3) Dactylorhiza hatagirea

    iucn

    • Known as Salampanja, it is threatened by habitat loss, livestock grazing, deforestation, and climate change.
    • It is extensively used in Ayurveda, Siddha, Unani and other alternative systems of medicine to cure dysentery, gastritis, chronic fever, cough and stomach aches.
    • It is a perennial tuberous species endemic to the Hindu Kush and Himalayan ranges of Afghanistan, Bhutan, China, India, Nepal, and Pakistan.

    Back2Basics: IUCN Red List

    • The IUCN Red List of Threatened Species founded in 1964, has evolved to become the world’s most comprehensive inventory of the global conservation status of biological species.
    • It uses a set of criteria to evaluate the extinction risk of thousands of all species and subspecies.
    • A series of Regional Red Lists are produced by countries or organizations, which assess the risk of extinction to species within a political management unit.
    • The IUCN aims to have the category of every species re-evaluated every five years if possible, or at least every ten years.
    • For plants, the 1997 Red List is the most important source.
    • The formally stated goals of the Red List are-
    1. to provide scientifically based information on the status of species and subspecies at a global level,
    2. to draw attention to the magnitude and importance of threatened biodiversity,
    3. to influence national and international policy and decision-making, and
    4. to provide information to guide actions to conserve biological diversity.

    Red List Categories of IUCN

    Species are classified by the IUCN Red List into nine groups specified through criteria such as rate of decline, population size, area of geographic distribution, and degree of population and distribution fragmentation. They are:

    • Extinct (EX) – beyond reasonable doubt that the species is no longer extant.
    • Extinct in the wild (EW) – survives only in captivity, cultivation and/or outside native range, as presumed after exhaustive surveys.
    • Critically endangered (CR) – in a particularly and extremely critical state.
    • Endangered (EN) – very high risk of extinction in the wild, meets any of criteria A to E for Endangered.
    • Vulnerable (VU) – meets one of the 5 red list criteria and thus considered to be at high risk of unnatural (human-caused) extinction without further human intervention.
    • Near threatened (NT) – close to being at high risk of extinction in the near future.
    • Least concern (LC) – unlikely to become extinct in the near future.
    • Data deficient (DD)
    • Not evaluated (NE)

     

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  • Post UPSC Mains 2022 result do one of these three things| 85% of our Mains students cleared UPSC Mains 2022 know how

    Post UPSC Mains 2022 result do one of these three things| 85% of our Mains students cleared UPSC Mains 2022 know how

    After UPSC Mains 2022 there are three things that you must do immediately. Read below.

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    It has been a couple of days since UPSC Mains results were announced. We hope all the resulting euphoria or disappointment might have settled down. Now is the time to collect yourself and prepare for the next step.

    85% of CivilsDaily’s Mains students cleared UPSC Mains 2022

    CD Mentors were flooded with calls from delighted aspirants all expressing gratitude for the guidance.

    Keep reading if you have cleared the Mains 2022 stage!

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    For first category of students, congratulations on clearing the UPSC 2022 Mains exam. We salute your grit and determination. You’re one of very few amongst lakhs of candidates who wrote prelims 2022 and now reached the final stage of selection. Give yourself a pat on the back.

    However, now that time has not come yet. This time is not for self-complacent. Instead, now is the time to cross the last hurdle (UPSC Personality Test) between you and the Civil Service.

    “It is time to work harder and smarter. There is just 1 stage that can separate you from your ultimate goal.”

    It is time to start the interview preparation. DAF II has been released now and must be submitted till 14th December, but it must be filled diligently.

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    For those who couldn’t find their name on the list, it is a time for introspection and reflection.

    “Failure is the opportunity to begin again more intelligently.”Henry Ford

    Even after giving your full-hearted attempt, you weren’t able to clear Mains and on the other hand, you might have encountered your friends and fellow aspirants who were able to clear it with ease.

    Certainly, there are things that must have been avoided and certain things that you must have done while preparing for UPSC Mains 2022.

    There might be issues at the fundamental level.

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    This is for the third category of students. Smash Mains is a highly personalized and intensive handholding program for the crème-de-la-crème (veterans) amongst UPSC aspirants.

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  • 9th Dec 2022 | Prelims Daily with Previous Year Questions

    9th Dec 2022 | Prelims Daily with Previous Year Questions

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  • G20: India at Urban20 (U20)

    G20

    Context

    • Fifty percent of the world’s population currently lives in urban areas, which is projected to increase by 1.5 times to 6 billion. However, cities continue to face mounting challenges in accommodating the needs of this rapidly expanding population. As a catalyst for global change, what promises can India’s presidency hold for half the world’s urban population?

    Background

    • India’s G20 presidency began on December 1. It will be driven by the underlying vision of “Vasudhaiva Kutumbakam”, best encapsulated by the motto “One Earth, One Family, One Future”.
    • G20’s Sustainable Development agenda aligns itself with sustainable actions to meet the goals of the 2030 Agenda.

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    G20

    What is Urban 20 (U20)?

    • A city diplomacy initiative within G20 ecosystem: Within the G20 ecosystem, a city diplomacy initiative called the “Urban 20” (U20) was launched in December 2017. As one of the formal Engagement Groups under G20, the U20 forum was meant to collectively raise critical urban issues of G20 cities during the G20 negotiations.
    • Special emphasis on cities: U20’s City Sherpas emphasise on the increasing importance of cities (both G20 and non-G20) as a country’s engines of innovation, economic growth, and productivity.
    • Focus on climate change and sustainable development: U20 specifically focuses on climate change, sustainable development, and socio-economic issues in connection with the Sustainable Development Goals.
    • Largely remained a platform of recommendation: Despite U20’s concerted efforts to run parallel to G20, the absence of any written constitution, procedures, or formal agreement has made U20 unable to effectively address the aspirations and concerns of cities. U20 seems to have largely remained a platform for expression and making recommendations without being able to directly influence urban planning or implement policy initiatives.
    • In this backdrop India has a unique opportunity: Within this framework, India now has the unique opportunity to outline and action specific U20 goals to link with the larger objectives of one of the most influential international forums.

    How U20 2023 provides an unique opportunity to India?

    • India’s U20 prospect can work towards engaging in meaningful policymaking and investments towards fulfilling the global 2030 Agenda.
    • By mindfully planning the allocation of urban resources and inspiring sustainable practices, India can set a new balanced template. While learning from the best practices of some of the soundest cities,

    G20

    How India can initiate actions at U20

    • Prioritizing post Covid urban social and emotional wellbeing: In a post-pandemic world, U20 2023 can priorities the role of urban mental health to raise awareness of its bearing as a consequence of an overpowering-built environment Urban amenities must account for the improvement of the overall quality of life and social-emotional well-being.
    • Emphasizing on efficient data and policies: U20 2023 can create a primer for effective data collection, analysis, monitoring, and reporting for timely assessment or urban plans to align with G20 and national agendas. Going further, India must emphasize policies for efficient data use and supporting data governance.
    • Increasing efficiency of digital services and bridging the digital divide gap: Digital literacy in urban India is only at 61 percent, suggesting a pervading low awareness of the government’s e-services. Moreover, gender biases in technology and digital skills lead to a greater gender digital divide suggesting a huge disparity in access to digital services. New regulatory frameworks are needed to encourage research and investment in bridging such gaps.
    • Gender inclusive planning to develop equitable cities: U20 2023 can call for global collaborations to develop equitable cities by engaging in dialogues around gender-inclusive planning. This is not only to benefit women and children but to include representation of diverse marginalised genders and LGBTQ+ persons in the urban planning process.
    • Prioritizing capacity building and training for city planners: It is also essential to highlight the importance of capacity building and training for planners and civic officials about the various sensitivities and impacts of urban development plans. India can bolster global joint discussions around increased investment in urban healthcare facilities.
    • Boosting investment in sustainable energy transition: While delivering on the Paris Agreement and the New Urban Agenda and 2030 Agenda, India can reinforce direct investment in areas such as sustainable energy and mobility transition. For instance, managing the risks of urban flooding in a changing climate has become a global focus area for policymakers.
    • Investing in quality education and skill development: With cities bourgeoning, investing in quality education and skilling has become critical to better prepare for the future of work and jobs for. Policies, across sectors, must support better skilling and training for entrepreneurship. For example, while the PM Employment Generation Programme and other Credit Support Schemes support MSMEs for training the youth and generating employment, we are yet to see their effectiveness and outreach. On the other hand, the rising trend of the gig economy demands innovative policymaking to accommodate the aspirations of the urban youth.
    • Local participation must be enhanced: Most importantly, U20 2023 can reinforce the importance of local-regional involvement for the integration of perspectives at the national and sub-national government bodies as the way forward. Urban Local Bodies (ULBs) can be strengthened further to facilitate basic infrastructure needs, inclusive economic growth and equitable development.

    G20

    How India can lead?

    • India’s theme of G20 2023 holds the promise of interconnectedness to bring in an attitudinal change through deliberation, partnerships, dialogues, cooperation and knowledge-sharing.
    • India can lead the way for global response and action by setting the stage for newer partnerships and agreements to facilitate community empowerment and social justice at both the local and societal levels.
    • By stressing on equity, inclusivity, sustainability and resilience, U20 2023 will be able to honour its commitment to establish better cities.

    Conclusion

    • By exploring the interlinkages and shared issues related to urban planning, India can help pave the way to bring about a global consensus for renewed urban vigour.

     

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