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  • Terrorist attack in Kabul’s Gurudwara

    Context

    Attack on gurdwara underlines that the US-Taliban deal has brought Afghanistan no respite.

    The futility of US-Taliban deal highlighted

    • The attack on a gurdwara in Kabul, in which 25 people were killed, has shown that the coronavirus may well be vanquished by science, but human beings will continue to inflict barbarity upon each other.
    • Within hours, it was claimed by the Islamic State, which later also said it had carried it out in revenge for Kashmir.
    • The deal not leading to peace: If there were still doubts left on this score, it must be clear after this attack that the US-Taliban deal was not an arrangement to return Afghanistan to peace.

    Why the attack matters for India?

    • The gurdwara attack was the first strike after the agreement claimed by the IS.
    • A provision in pact: Under the pact, the Taliban have committed themselves to eliminate the Islamic State from Afghanistan.
    • Yet to start honouring commitment: If the IS claim is true, the Taliban have yet to begin honouring that commitment.
    • India’s reaction: Appearing to hint at something more sinister, the ministry of external affairs called the attack “diabolical” and condemned the “perpetrators and their backers”, a formulation usually reserved for attacks suspected to have emanated from or to have the backing of Pakistan.
    • Connection of attack with India: The Taliban’s operational leadership is now in the hands of Sirajuddin Haqqani of the Haqqani group, which has been blamed for several attacks on Indian targets, including the 2008 Indian Embassy bombing in Kabul.
    • The Taliban have denied having anything to do with the gurdwara attack, and Pakistan has condemned it strongly.
    • The question over IS in Afghanistan: Who, really, is the IS in Afghanistan is a question that security experts have been asking for some time now.

    COVID-19 outbreak in Afghanistan

    • Appeal for ceasefire: The UN Secretary-General made an appeal for an immediate ceasefire in theatres of conflict across the world, to enable governments, health workers and humanitarian aid agencies to access those who might be most vulnerable to COVID-19.
    • The epicentre of the outbreak is Herat, where over 1,00,000 Afghans recently crossed over from Iran.
    • After the number of confirmed cases rose to 58, the province has been placed under lockdown.
    • But the government is hobbled in its efforts to contain the disease, both by a contested election result — Afghanistan has two presidents — and the burden of an agreement that has brought it no respite.

    Conclusion

    With the recently concluded US-Taliban deal delivering no peace and coronavirus spreading unabated, Afghanistan faces two contagions, new and old — COVID-19 and the relentless violence.

  • What the RBI has done to provide relief for the ongoing Coronavirus outbreak in India

    Context

    The RBI’s Governor’s ‘bazooka’ announcement earlier today has seen the usually conservative institution and its head pull out the big guns in word and action.

    Four steps taken by the RBI

    • One, increase the liquidity in the system.
    • Two, make sure the lower policy rate is transmitted. Steps one and two are linked.
    • Three, give a three-month window for a payback on all term loans.
    • Four, take steps to reduce volatility and provide stability.
    • Big cut in repo rate: He announced a big cut in the repo rate by 75 basis points (100 basis points make a per cent, so three-quarters of a percentage point) to 4.4%.
    • What is the repo rate? Repo rate is the rate at which the banks borrow from the RBI. Banks give ‘eligible securities’ they hold for cash that RBI gives as an overnight loan.
    • Banks pay the repo rate as interest for this borrowing.

    First two steps of the RBI: Increasing liquidity and ensuring policy rate transmission

    • Why lower repo rate matters? When the repo rate is high, banks find it costly to borrow and in turn raise the price of loans to their borrowers.
    • Reducing interest for the system: A low repo rate has the overall effect of reducing interest rates for the system. Lower rates make it easier for entrepreneurs to take loans for working capital and for households for homes, vehicles and so on.
    • Issue of policy rate transmission: Previous rate cuts have not been ‘transmitted’ by the banks who have not reduced lending rates and have preferred to keep money with the RBI at the ‘reverse repo rate’.
    • What is reverse repo rate? This is the rate at which banks lend to the RBI.

    How RBI is ensuring transmission now?

    • The RBI has now reduced the reverse repo rate by 90 basis points to 4%.
    • This cut in reverse rape sharper than the one on the repo rate to encourage banks to borrow from the RBI rather than lend to it.
    • How reverse repo rate matters? Banks have preferred to deposit money with the RBI rather than lend it out with an average daily amount of ₹3 trillion being kept with the RBI.
    • A reduction of the reverse repo to 4% makes it unattractive to banks to park it with the RBI and banks will be nudged to lend.
    • Why bank lending matters for business? Bank lending provides the needed oxygen to businesses for their working capital and longer-term loans.
    • Read this as a measure to help banks take the decision to lend rather than play it safe by keeping money with the RBI.

    How lock-down slows down the economy?

    • Rush to safety for money: If people are in a lock-down, the wheels of the economy begin to grind down and there is a rush to safety for money in the system.
    • Freezing of the markets market: Investors begin to redeem their shares, bonds and mutual funds. These redemptions cause a fire sale of assets. Finally, when there are no buyers, markets begin to freeze.

    What are the measures taken by RBI to stabilise the market?

    • To keep the wheels of the markets well-oiled with cash, the RBI has made ₹3.74 trillion available. This it has done using four weapons.
    • The first measure: It has used targeted long-term repo operations.
    • RBI will lend money to banks (a total of ₹1 trillion) that can be invested in bonds and other forms of lending instruments.
    • What is a hold-to-maturity way? Under the hold-to-maturity way, the portfolio is valued not on the market price but on what the price should be given the rate of interest of the bond, the holding period and the rating of the bond.
    • Basically, it allows trades to happen at a price that is not confused with the current pandemic in the market.
    • The second measure: The RBI reduced the cash reserve ratio (CRR) by a full percentage point down to 3% for a year.
    • The CRR is the percentage of demand and time deposits banks have to keep with the RBI.
    • Why CRR and not SLR was reduced? There is another 18.25% of deposits that is also not used for lending under the Statutory Liquidity Ratio (SLR), further reducing the money banks have to lend.
    • RBI has reduced the CRR to 3%, freeing up ₹1.37 trillion for banks to lend. CRR has been chosen rather than SLR because this increases ‘primary liquidity’ with the banks a bit better.
    • Not only is there CRR rate down, banks now need to maintain 80% of the limit on a daily basis instead of 90% till June 26, 2020.
    • The third measure: ₹1.37 trillion will be made available under the emergency lending window called the marginal standing facility (MSF).
    • Banks will now be able to borrow 3% of their deposits under this window, up from the current 2%. Basically, RBI is willing to lend more than before.
    • How much more? ₹1.37 trillion under this window.

    The third step of the RBI: Regulatory forbearance

    • What is the regulatory forbearance?

      What this means is that as economic activity grinds to a slowdown, people will not be able to pay back the loans they have taken for no fault of theirs.

    • This could be businesses with loans, households with EMIs on home loans and others with what are called ‘term loans’.
    • RBI will allow a moratorium of three months for loan repayment.
    • This is a relief especially for small entrepreneurs who have been forced to shut shop and for employees whose incomes have stopped since their place of work is shut.
    • It is good that the RBI has looked at the retail part of the market along with the corporate sector for once.
    • Working capital loans don’t come under the ‘term loan’ category, and these borrowers can defer paying interest for three months till June 2020.

    The fourth step of the RBI: Measures to reduce volatility in the exchange rate

    • Fourth is a measure to reduce the volatility of the price of the rupee in international markets by allowing banks to deal in off-shore non-deliverable rupee derivative markets.
    • It looks like reform using the crisis to bring about this long-awaited change.

    Conclusion

    We don’t know if measures taken by the RBI and the government are enough. But what is comforting is that the government and the RBI are working in tandem to deal with this giant killer of a virus.

  • Get ready for the upcoming February Current Affairs Prelims Test on 28th March- sample questions highlighting our methodology

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  • Regulation of Payment Aggregators (PAs)

    The Reserve Bank of India released guidelines for regulating payment aggregators (PAs) and payment gateways (PGs), nearly six months after it first proposed regulating these entities in a discussion paper.

    Payment Aggregators (PAs)

    • PAs are entities that facilitate e-commerce sites and merchants to accept various payment instruments from the customers for the completion of their payment obligations.
    • PGs are entities that provide technology infrastructure to route and facilitate the processing of an online payment transaction without any involvement in the handling of funds.
    • With the new set of guidelines PAs and PGs such as Paytm, Pay Pal, Mobikwik, Razorpay, PayU, CCAvenue etc. will be regulated by RBI to ensure the safety of all our online transactions.

    What are the new guidelines?

    The new guidelines say that-

    • A payment aggregator (entities that facilitate e-commerce sites and merchants to accept various payment instruments) should be a company incorporated in India under the Companies Act, 1956 / 2013.
    • Non-bank entities offering payment aggregator services will have to apply for authorisation on or before June 30, 2021.
    • E-commerce marketplaces providing payment aggregator services will have to be separated from the marketplace business and they will have to apply for authorisation on or before June 30, 2021.
    • Pas existing today will have to achieve a net worth of ₹15 crore by March 31, 2021 and a net worth of ₹25 crore by the end of third financial year, which means or before March 31, 2023.
    • The net-worth of ₹25 crore shall be maintained at all times thereafter.
  • Serological test for COVID-19

    The ICMR invited bids for an estimated 10 lakh antibody kits (for serological tests) for the diagnosis of COVID-19.

    What are serological tests?

    • Viral infections are mainly identified by two kinds of tests– genetic and serological.
    • Genetic tests can identify infections that are active but cannot be used to detect past infections.
    • To trace how infections like the novel coronavirus have spread so far, it is important to detect people who contracted the disease in the past and have recovered.
    • This is what serological tests seek to determine.

    How are the two different?

    • The genetic test is conducted on a swab collected from the back of the throat, a liquid sample from the lower respiratory tract, or a simple saliva sample.
    • For SARS-COV-2, the virus’s RNA is first converted into DNA.
    • By a process called polymerase chain reaction (PCR), DNA fragments in the sample are copied exponentially — one is copied into two, the two are copied into four, and so on.
    • Unlike genetic tests, which look for RNA in swab samples, serological tests work on antibodies in blood samples. Hence, they are also called ‘antibody tests’.

    How serological tests work?

    • Antibodies, or protective proteins produced by the immune system to neutralize pathogens such as bacteria and viruses, are present in one’s bloodstream for a considerable period of time after the infection has gone.
    • To disable a pathogen, the antibody latches to a unique protein molecule on pathogen’s surface, called an antigen.
    • Serological tests use antigen molecules to detect the presence of antibodies relevant to the infection.
    • Generally, a blood sample is placed in a test tube that is lined with antigens on the inside. If the relevant antibodies are present, they latch on to the antigens.
    • Such tests are relatively inexpensive, and can display results within a few minutes.
  • [pib] Virtual Summit of G20 Leaders

    A Virtual G20 Leaders’ Summit was recently convened yesterday to discuss the challenges posed by the outbreak of the COVID-19 pandemic and to forge a globally coordinated response.

    About G20

    • Formed in 1999, the G20 is an international forum of the governments and central bank governors from 20 major economies.
    • Collectively, the G20 economies account for around 85 percent of the Gross World Product (GWP), 80 percent of world trade.
    • To tackle the problems or the address issues that plague the world, the heads of governments of the G20 nations periodically participate in summits.
    • In addition to it, the group also hosts separate meetings of the finance ministers and foreign ministers.
    • The G20 has no permanent staff of its own and its chairmanship rotates annually between nations divided into regional groupings. 

    Aims and objectives

    • The Group was formed with the aim of studying, reviewing, and promoting high-level discussion of policy issues pertaining to the promotion of international financial stability.
    • The forum aims to pre-empt the balance of payments problems and turmoil on financial markets by improved coordination of monetary, fiscal, and financial policies.
    • It seeks to address issues that go beyond the responsibilities of any one organisation.

    Member Countries

    The members of the G20 consist of 19 individual countries plus the European Union (EU).

    • The 19 member countries of the forum are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom and the United States.
    • The European Union is represented by the European Commission and by the European Central Bank.

     Who are the G20 Sherpas?

    • A Sherpa is the personal representative of a head of state or government who prepares an international summit, particularly the annual G7 and G20 summits.
    • Between the summits, there are multiple Sherpa conferences where possible agreements are laid out.
    • This reduces the amount of time and resources required at the negotiations of the heads of state at the final summit.
    • The Sherpa is generally quite influential, although they do not have the authority to make a final decision about any given agreement.
    • The name is derived from the Sherpa people, a Nepalese ethnic group, who serve as guides and porters in the Himalayas, a reference to the fact that the Sherpa clears the way for a head of state at a major summit.
  • [pib] Project ‘Isaac’

    IIT, Gandhinagar has launched Project Isaac to engage its students in creative projects to enhance their critical skills while they are confined to their homes because of Coronavirus.

    Project ‘Isaac’

    • The project is inspired by Sir Isaac Newton, who was similarly sent home by Trinity College, Cambridge, because of the Great Plague of London in 1665.
    • During this year, Newton, then a 22-year-old college student developed some of his most profound discoveries, including early calculus, as well as his theories of optics and gravity.
    • As part of the project, four different competitions are being organized by IIT, Gandhinagar to cultivate new skills among students regarding writing, painting, coding, music, creative expression, and so on.
    • Students can take part in competitions online.
  • What is Keqiang Index’?

    China’s GDP numbers which are preferably represented by Keqiang Index has been recently seen in news amid coronavirus outbreak.

    Keqiang Index

    • Li Keqiang index or Keqiang index is an economic measurement index created by The Economist to measure China’s economy using three indicators, as reportedly preferred by Li Keqiang.
    • It uses three other indicators:
    1. the railway cargo volume,
    2. electricity consumption and
    3. loans disbursed by banks
    • Li Keqiang currently the Premier of the People’s Republic of China, suggest the index as better economic indicator than official numbers of GDP.
  • [Prelims Spotlight] Important Rebellions- Part 1

     

    Prelims Spotlight is a part of “Nikaalo Prelims 2020” module. This open crash course for Prelims 2020 has a private telegram group where PDFs and DDS (Daily Doubt Sessions) are being held. Please click here to register.


    27 March 2020

    Important Rebellions- Part 1

    Causes of the rebellions

    • After seizing the power and starting their rule the British caused dislocation in ways Indian were used to. The areas in which the change was felt the most were viz. economy, administration and land revenue system.
    • The British rule which adversely affected the interests of all sections of society had intensified the land revenue. The only interest of the company was the realization of maximum revenue with minimum effort. Consequently, settlements were hurriedly undertaken, often without any regard for the resources of the land.
    • Traditional landed aristocracy suffered no less. Their estates were confiscated and they suddenly found themselves without a source of income, unable to work, ashamed to beg, condemned to penury.
    • British rule also meant misery to artisans and handicraftsmen. The annexation of Indian states by the Company cut off their major source of patronage. Also, the British policy discouraged Indian handicraft and promoted British goods.
    • The new courts and legal system gave a further fillip to the dispossessors of land and encouraged the rich to oppress the poor. Flogging, torture and jailing of the cultivators for arrears of rent or land revenue or interest on debt were quite common. The ordinary people were also hard hit by the prevalence of corruption at the lower levels of the police, judiciary and general administration.

    Sanyasi Uprising, Bengal- (1770-1820s)

    • At least three separate events are called the Sannyasi Rebellion. One refers to a large body of Hindu sannyasis who travelled from North India to different parts of Bengal to visit shrines. En route to the shrines, it was customary for many of these ascetics to exact a religious tax from the headmen and zamindars or regional landlords
    • However, since the East India Company had received the Diwani or right to collect the tax, many of the tax demands increased and the local landlords and headmen were unable to pay both the ascetics and the English.
    • The other two movements involved a sect of Hindu ascetics, the Dasnami naga sannyasis who likewise visited Bengal on pilgrimage mixed with moneylending opportunities.
    • To the British, these ascetics were looters and must be stopped from collecting money that belonged to the Company and possibly from even entering the province. It was felt that a large body of people on the move was a possible threat.
    • The sanyasis retaliated by organising raids on the Company’s factories and state treasuries. Only after prolonged military action could Warren Hastings contain the raids by the sanyasis.

    Chuar uprising

    • Towards the end of the 18th century, certain portions of the district around Raipur was affected by the Chuar rebellion.
    • The leader of the rebels was Durjan Singha, a former zamindar of Raipur. He had a following of about 1,500 men and created havoc in certain areas.
    • The uprising lasted from 1766 to 1772 and then, again surfaced between 1795 and 1816.

    Moplah Rebellions, Malabar (1835-1921)

    • The Moplah rebellions of Malabar, South India, were not only directed against British but also the Hindu Landlords.
    • The relations of the Arabs traders with the Malayali society can be traced back to the ninth century. The traders helped the local Hindu chieftains and were granted concessions.
    • Many of the Arab traders settled in Malabar marrying mostly Nayar and Tiyar women, and the subsequent descendants came to be known as Moplahs.
    • In the traditional Malabar land system, the Jenmi held land by birthright and were mostly highcaste Hindus, and let it out to others for cultivation.
    • The other main sections of the Malabar society were the Kanamdar, who were mostly Moplahs, the verumpattamdar (cultivators) and agricultural labourers. The peasants were mostly the Muslim Moplahs.
    • The land was given by the ruling raja to Namboodiri Brahmins whose obligation was to look after the temple and related institutions, and to the chieftains (mostly Nayars), who provided martial aid when needed.
    • Traditionally, the net produce of the land was shared equally between the three.
    • But during the reign of Haider Ali and Tipu Sultan, Namboodiri Brahmins and Nayar Chiefs fled and the subsequent vacuum was filled by the Moplahs.
    • The conflict arose when after Malabar’s cession to the British in 1792 and the return of the exiled Namboodiri Brahmins and Nayars, the government re-established and acknowledged their landlord rights.
    • The British by recognizing the Jenmis as the absolute owners of the land gave them the right to evict the tenants at will.
    • This reduced the other two to the status of tenants and leaseholders.
    • The courts and the law officers sided with the Jenmis. Once the Jenmi landlords, who had the backing of the revenue officials, the law court and the police started tightening their hold and demands on the subordinate classes, the Moplah peasantry rose up in revolt.
    • The first outbreak occurred in 1836 and during the period of 1834-54, there were 22 uprisings, with the ones in 1841 and 1849 being quite serious.
    • The second phase of the revolt was recorded in 1882-85, while another spate of outburst in 1876 was also there.

    Poligar Rebellions, Kurnool (1799-1805)

    • The Poligars of Dindigal and Malabar rose up against the oppressive land revenue system under the British during 1801-06.
    • The sporadic rising of the Poligars in Madras Presidency continued till 1856.
    • In September 1799, in the first Polygar War, the poligars of Tirunelveli District rose up in open rebellion.
    • Kattabomma Nayak of Panchalamkurichi was considered as the main leader of the rebellion. Though he managed to escape initially, he was later captured in Pudukottai, and publicly hanged in front of other Polygars as a warning.
    • The Second Polygar war of 1800-01, given the magnitude of participation, is also known as the “South Indian Rebellion”.
    • The rebellion broke out when a band of Polygar armies bombed the British barracks in Coimbatore.
    • The suppression was followed by signing of the Carnatic Treaty on July 31, 1801, whereby the British assumed direct control over Tamil Nadu.
    • The Polygar system, which had flourished for two and half centuries, came to a violent end and the company introduced the Zamindari settlement in its place.

    Ramosi Risings (1822, 1825-26)

    • The Ramosis, the hill tribes of the Western Ghats, had not reconciled to British rule and the British pattern of administration.
    • They rose under Chittur Singh in 1822 and plundered the country around Satara. Again, there were eruptions in 1825-26 and the disturbances continued till 1829.
    • The disturbance occurred again in 1839 over deposition and banishment of Raja Pratap Singh of Satara, and disturbances erupted in 1840-41 also. Finally, a superior British force restored order in the area.

    Kolhapur and Savantvadi Revolts (1844)

    • The Gadkaris were a hereditary military class which was garrisoned in the Maratha forts.
    • These garrisons were disbanded during an administrative reorganisation in Kolhapur state after 1844. Facing the spectre of unemployment, the Gadkaris rose in revolt and occupied the Samangarh and Bhudargarh forts.
    • Similarly, the simmering discontent caused a revolt in Savantvadi areas.
    • A number of Sawantwadi rebels were tried for treason and sentenced to various terms of imprisonment.
    • Ultimately, after the imposition of martial law and meting out brutal punishment to the rebels, the order could be restored in Sawantwadi region.

    Santhal Rebellion

    • The Santhals of Rajmahal Hills resented the oppression by revenue officials, police, money-lenders, landlords—in general, by the “outsiders’ (whom they called diku).
    • The Santhals under Sido and Kanhu rose up against their oppressors, declared the end of the Company’s rule and asserted themselves independent in 1854.
    • It was only in 1856 after extensive military operations that the situation was brought under control. Sido died in 1855, while Kanhu was arrested in 1866.
    • A separate district of Santhal Parganas was created by the Government to pacify the Santhals.

    Khond Uprising

    • The Khonds lived in vast hill tracts stretching from Tamil-nadu to Bengal, covering central provinces, and in virtual independence due to the inaccessible mountainous terrain.
    • Their uprisings from 1837 to 1856 were directed against the British, in which the tribals of Ghumsar, china-ki-medi, Kalahandi and Patna actively participated.
    • The movement was led by Chakra Bisoi in the name of the young Raja.
    • The main issue was the attempt by the government to suppress human sacrifice (Mariah), the introduction of new taxes by the British and the influx of Zamindars and sahookars (money-lenders) into their areas which was causing the tribals untold misery.
    • The British formed a Maria agency, against which the Khonds fought with Tangi, a king of battle-axe, bows-arrows and even swords.
    • Latter Savaras and some local militia clans also joined in, led by Radha Krishna Dand Sena. Chakra Bisoi disappeared in 1855 after which the movement petered out.

    Early Munda Uprising (1789-1832)

    • In the period of 1789-1832, the Munda rose up in rebellion seven times against the landlords, dikhus, money-lenders and the British, who instead of protesting them sided with the oppressors.
    • In the post-1857 period with a hope of a better future, many Mundas turned to the Evangelical Lutheran mission, which was overseeing mission work in Chhotanagpur.
    • However, many apostates became more militant and broke away, spearheading the cause of seeking redressal of their grievances once they realized that the missionaries could not provide the solution to them.
    • Their movement identified as ‘sardariladai’ or ‘war of the leaders’ was fought with the aim of expelling dikhus; and restoration of the Munda domination over their homeland.
    • The tribal chiefs rose up against the erosion of Khuntkatti System or Joint tenures.
    • While it failed it did not peter out but remained dormant and in need of a charismatic leader. It was given a new life by Birsa Munda in 1899.

    Bhils and Kolis Uprisings:

    • The Bhils were concentrated in the hill ranges of Khandesh in the previous Maratha territory. The British occupation of this region in 1818 brought in the outsiders and accompanying dislocations in their community life.
    • A general Bhil insurrection in 1817-19 was crushed by the British Military forces and though some conciliatory measures were taken to pacify them, they again revolted under the leadership of Seva Ram in 1825 and the situation remained unsettled until 1831 when the Ramosi Leader Umaji Raje of Purandhar was finally captured and executed.
    • Minor revolts again took place in 1836 and 1846 as well.
    • The Bhils’ local rivals for power, the Kolis of Ahmednagar district, also challenged the British in 1829 but were quickly subdued by a large army contingent.
    • The seeds of rebellion, however, persisted, to erupt again in 1844-46, when a local Koli leader successfully defied the British government for two years.

     

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