💥Mains Ready By December. Smash Mains & Smash PYQ Admissions Open
Talk to Mentor

Civilsdaily

Login

Search results for: “”

  • Tobacco Consumption in India

    Tobacco use is known to be a major risk factor for several non-communicable diseases in India.

    Tobacco abuse in India

    • In India, 28.6% of adults above 15 years and 8.5% of students aged 13-15 years use tobacco in some form or the other.
    • This makes the country the second-largest consumer of tobacco in the world.

    Concern: No action against Tobacco

    • India bears an annual economic burden of over ₹1, 77,340 crores on account of tobacco use.
    • There has been no major increase in taxation of tobacco products to discourage the consumption of tobacco in the past four years since the introduction of GST.
    • Only in 2020-21, the Union Budget had the effect of increasing the average price of cigarettes by about 5%.
    • Yet, the excise duty on tobacco in India continues to remain extremely low.

    A worrying trend

    • No increase in tax: The absence of an increase in tax means more profits for the tobacco industry and more tax revenue foregone for the government.
    • Revenue losses: This revenue could have easily been utilized during the COVID-19 pandemic.
    • Losses due to GST: There has been a 3% real decline in GST revenues from tobacco products in each of the past two financial years.

    Present governance of Tobacco

    • GST slab: Tobacco at present is a highly taxed commodity. It is kept in the 28% GST slab (other than for tobacco leaves which is taxed at 5%).
    • Heavy cess: Tobacco and its various forms are also subject to a heavy burden of cess, given that the commodity is seen as a sin good.
    • Statutory warning: The government also uses pictures of cancer patients on the packages of cigarettes to discourage its use.

    Federal issues

    • Excise taxes on many tobacco products used to be regularly raised in the annual Union Budgets before the GST.
    • Similarly, several State governments used to regularly raise value-added tax (VAT) on tobacco products.
    • During the five years before the introduction of the GST, most State governments had moved from having a low VAT regime on tobacco products to having a high VAT regime.

    Implication of such policies

    • Increased consumption: The lack of tax increases in post-GST years might mean that some current smokers smoke more now and some non-smokers have started smoking.
    • Reverse trend in decline: This could potentially lead to a reversal of the declining trend in prevalence.
    • Affordability: Tobacco products are more affordable post-GST as shown in recent literature from India.
    • Missing up national target: This might jeopardise India’s commitment to achieving 30% tobacco use prevalence reduction by 2025 as envisaged in the National Health Policy of 2017.

    Way forward

    • Several countries in the world have high excise taxes along with GST or sales tax and they are continuously being revised.
    • We must adhere to the WHO recommendation for a uniform tax burden of at least 75% for each tobacco product.
    • The Union government should take a considerate view of public health and significantly increase excise taxes — either basic excise duty or NCCD — on all tobacco products.
    • Taxation should achieve a significant reduction in the affordability of tobacco products to reduce tobacco use prevalence and facilitate India’s march towards sustainable development goals.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • The ‘diplomatic’ Olympic boycott

    The US Government has decided not send any official representation to the Winter Olympic Games in Beijing announcing what is being called a “diplomatic boycott” of the games.

    What is a ‘diplomatic boycott’?

    • A “diplomatic boycott” means no US official will be present at the Winter Olympics in Beijing.
    • This stops short of a complete boycott, which would have meant the non-participation by US athletes.
    • As such, the absence of official representation will not impact the games as much as an athletic boycott would have.

    What led to the US boycott?

    Ans. Uyghurs Genocide

    • The decision was taken because of China’s gross human rights abuses and atrocities in Xinjiang.
    • This is the latest clash adding to a long list of differences on trade, Taiwan, human rights and the South China Sea.
    • Xinjiang Uyghurs have been sent by Chinese authorities to “re-education” camps, a network of which were constructed beginning in 2016 to house thousands of detainees.
    • Beijing initially denied the existence of the camps, but subsequently claimed the centres were for “vocational training”.

    Who else is ‘diplomatically boycotting’ the games?

    • So far, Australia, Canada, and New Zealand have also announced that their officials will not be present at the games.
    • None, however, has said their athletes will not attend, which means the games themselves are unlikely to be impacted.
    • It remains to be seen if the boycott will gain traction beyond US allies and partners.
    • Russian President Vladimir Putin will travel to Beijing for the opening of the Winter Olympics.
    • China has been garnering support from countries in Asia, Africa and Latin America.

    How is China reacting to the boycott?

    • Beyond the statements decrying the “politicization” of sports, there is certainly a domestic political undercurrent to the games.
    • China’s media, meanwhile, has been largely playing down the reports of the boycotts, underlining how the authorities are going all-out to ensure the games are conducted without a hurdle.

    What will be the impact on US-China relations?

    • Much recently, the US and Chinese Presidents committed to “responsibly” managing their growing competition amid increasing conflicts.
    • Both nations called common-sense guardrails to ensure that competition does not veer into conflict.
    • China emphasized the “need to treat each other as equals” and warned against “drawing ideological lines”, calling on the US “to meet its word of not seeking a ‘new Cold War’”.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • Constituent Assembly debates around Citizenship

    This newscard is an excerpt from the ‘Letter and Spirit’ section in the print edition of TH, which is a new column that will focus on explaining and understanding basic Acts and Articles enshrined in our Constitution.

    Context

    • With the contentious farm laws repealed, the discussions turn to the second most politically and legally resisted legislation of recent times, The Citizenship (Amendment) Act, 2019.
    • The citizenship question finds its retro-reflection in the Constituent Assembly debates which serve as the undeniable autobiography of India’s basic law.

    Debate over CAA, yet again

    • CAA asserts that only people belonging to some faiths are victims of persecution and violence and the doors of the country can be legitimately shut to any other instance of persecution and ethnic violence.

    A ‘headache’ for the Drafting Committee

    • The citizenship question had been one of the most difficult tasks confronted by the drafting committee as admitted by Dr B.R.Ambedkar.
    • He moved a set of consolidated amendments to the citizenship provisions of the original draft.
    • He said that the task had given the drafting committee “such a headache” and multiple “drafts were prepared” and “destroyed” before arriving at a consensus.

    The critics

    • The draft did not satisfy all but to the most due to its secular and liberal provisions.
    • It was fiercely contested on the floor of the Constituent Assembly on religious, ethnic and hyper-nationalistic considerations.
    • The Article 5 of the draft constitution was criticized for its lack of exclusive and preferential provisions on religious lines regarding the declaration as to who shall be the citizen of India during commencement of the Constitution.
    • Then Article 5A (today’s Article 7 of the Constitution) sought to grant citizenship rights to the migrants of Pakistan who had returned to India under a permit for resettlement granted by Indian authorities.

    The ‘Jus Soli’ Principle

    • This principle is premised on the automatic grant of citizenship based on the place of birth provided the person is domiciled in India, qualifying it with religious identity.
    • It was in fact a proposal to ingrain religion into the bedrock of the Constitution.
    • Dr P.S.Deshmukh from the Central Provinces and Berar proposed changes to Article 5 of the draft by proposing to replace the universally honoured “jus soli” principle by qualifying it with a religion.
    • He went on to state that every person who is a Hindu or a Sikh by religion and is not a citizen of any other State, wherever he resides shall be entitled to be a citizen of India.

    Issue over indiscriminate grant of citizenship

    • The concern of Dr. Deshmukh justifying the exclusion of people belonging to other religions, as echoed in his question- Is it then wise that we should throw opens our citizenship so indiscriminately?
    • It found fraternal support from members who opined that Hindus and Sikhs have no other home but India.
    • This finds its resonance today in the presumptive base of the CAA.

    The defenders

    • Some highlighted the fact of panic driven migration without certain intention to settle down in Pakistan was left unanswered with precision.
    • Some retorted that mentioning the name of some communities will make other communities feel that they were being ignored.

    What did Nehru opine?

    • Nehru stated that we cannot have rules for Hindus, for Muslims and for Christians only.
    • He stressed upon the possibility of the second wave of migration including non-Hindus and non-Sikhs who were part of the first wave influx.
    • Hence, in his view, foreclosing the doors fearing the influx of some may deprive others of exercising their choice.

    Ambedkar on Pakistan returnees

    • Ambedkar clarified that the principal thrust of Article 5A was to declare that persons who migrated to Pakistan after 1st of March 1947 due to internal disturbances.
    • He declared that some migrants from Pakistan were allowed to return on the basis of the agreements between both the Governments and on the basis of an ordinance promulgated.

    Conclusion

    • The Constituent Assembly debates on citizenship showed that in the rousing of sentiments of ethnicity and distrust, sagacity had an upper hand, leading to the saner denouement of toleration.
    • History is known to set examples.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • What are Non-convertible Debentures?

    Several companies have announced public issues to raise funds through non-convertible debentures.

    What are Debentures?

    • Debentures are long-term financial instruments issued by a company for specified tenure with a promise to pay fixed interest to the investor.
    • They can be held by individuals, banking companies, primary dealers other corporate bodies registered or incorporated in India and unincorporated bodies.
    • Their types include:
    1. Convertible debentures (CDs): They are a type of debentures that can be converted into equity shares of the company.
    2. Non-convertible debentures (NCDs): They are defined as the type of debentures that cannot be converted into equity shares of the company.

    What are NCDs?

    • Some debentures have a feature of convertibility into shares after a certain point of time at the discretion of the owner.
    • The debentures which can’t be converted into shares or equities are called non-convertible debentures (or NCDs).
    • They are debt financial instruments that companies use to raise medium- to long-term capital.

    Benefits offered by NCDs

    • At a time when fixed deposit rates are in low single digits, these NCD offerings look lucrative.
    • NCDs offer interest rates between 8.25–9.7%.

    Risks posed

    • Although NCDs are generally considered safe fixed-income instruments, some recent defaults have made investors cautious.
    • NCDs can be either secured by the issuer company’s assets, or unsecured.
    • Certain issuers, with credit rating below investment grade, had in the past issued both a secured NCD and another unsecured one through the same offer document, with different credit ratings.
    • The risk is high in the case of unsecured NCDs, even though they offer high-interest rates.
    • Credit rating of the issuer is a key factor to consider before investing in any NCD.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • Global Health Security Index, 2021

    Countries across all income levels remain dangerously unprepared to meet future epidemic and pandemic threats, according to the new 2021 Global Health Security (GHS) Index.

    About GHS Index

    • The GHS Index is the first comprehensive assessment and benchmarking of health security and related capabilities across the 195 countries that make up the States Parties to the International Health Regulations.
    • It is a project of the Johns Hopkins Centre for Health Security, the Nuclear Threat Initiative (NTI) and the Economist Intelligence Unit (EIU) and was first launched in October 2019.
    • It assesses countries across 6 categories, 37 indicators, and 171 questions using publicly available information.
    • It benchmarks health security in the context of other factors critical to fighting outbreaks, such as political and security risks, the broader strength of the health system, and country adherence to global norms.

    Parameters assessed

    The report is based on a questionnaire of 140 questions, organized across 6 categories, 34 indicators, and 85 sub-indicators. The six categories are:

    1. Prevention: Prevention of the emergence or release of pathogens
    2. Detection and Reporting: Early detection and reporting for epidemics of potential international concern
    3. Rapid Response: Rapid response to and mitigation of the spread of an epidemic
    4. Health System: Sufficient and robust health system to treat the sick and protect health workers
    5. Compliance with International Norms: Commitments to improving national capacity, financing plans to address gaps, and adhering to global norms
    6. Risk Environment: Overall risk environment and country vulnerability to biological threats

    Global performance

    • In 2021, no country scored in the top tier of rankings and no country scored above 75.9, the report showed.
    • The world’s overall performance on the GHS Index score slipped to 38.9 (out of 100) in 2021, from a score of 40.2 in the GHS Index, 2019.
    • This, even as infectious diseases are expected to have the greatest impact on the global economy in the next decade.
    • Some 101 countries high-, middle- and low-income countries, including India, have slipped in performance since 2019.

    Indian scenario

    • India, with a score of 42.8 (out of 100) too, has slipped by 0.8 points since 2019.
    • Three neighboring countries — Bangladesh, Sri Lanka and Maldives — have improved their score by 1-1.2 points.

    Conclusion

    • Health emergencies demand a robust public health infrastructure with effective governance.
    • The trust in government, which has been a key factor associated with success in countries’ responses to COVID-19, is low and decreasing, the index noted.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • All UPSC-CSE Mains Recommended Candidates, Here’s a Good News!|| Civilsdaily is Providing Free 360° Comphrehensive Notes on 250 Most Important Topics of Mains 2021|| Register Now & Get them for FREE|| Quality Enrichment Program

    All UPSC-CSE Mains Recommended Candidates, Here’s a Good News!|| Civilsdaily is Providing Free 360° Comphrehensive Notes on 250 Most Important Topics of Mains 2021|| Register Now & Get them for FREE|| Quality Enrichment Program

    register here for free to get 250 imp topic notes & test series
    Program starting from the second week of December.

    UPSC CSE Mains 2021 will be conducted on January 2022 and is hardly a month away. It’s time to practice a lot of test series and revise the topics.

    We, at Civilsdaily rose to the occasion and have prepared consolidated notes of the 250 most important topics of Mains 2021. Each topic will have 2-3 pages of notes of material from the standard books and current affairs. They will also have relevant factual data and statistics highlighted in bold for every topic that will help you provide a solid introduction and conclusion.

    And the best news is…. all of this is absolutely free for all Mains selected candidates! Just fill the form right now to request the QEP material and we will get in touch with you with ASAP.

    How Quality Assessment Program be useful right now?

    You might be wondering, with just a month away is it wise to register for any program right now, even for free? You don’t have to worry. The Quality Assessment Program is not new information. It’s consolidated revision notes from the standard books and current affairs of UPSC-CSE Mains.

    Our initiative last year of compiling issues and topics that had a high probability of being asked in Mains 2020 was a thumping success– our toppers said they greatly benefitted from it. One such topper, Lakshay Chowdhary was gracious enough to give us a video testimonial.

    Questions in 2020 Mains came from topics we covered like Pala period, Circum-Pacific zone, Online Education in India, Criminalization in Politics, 16 years of RTI, Microfinance etc.

    Coverage of topics in QEP will have one and only one purpose – to enable you to write great answers for any question from a particular topic. To be able to write a convincing 250 words answer for a topic, you need to know atleast 1-2 pages of content for it.

    At this point in time studying everything is not desirable neither is it feasible. You don’t have time to read everything, segregate what is important and what’s not, make notes, cover different dimensions, and then find a way to utilize that. What you need at this point in time is efficient and organized coverage of the most relevant topics for the IAS mains exam. With QEP we aim to help you achieve all this.

    QEP or Quality Enrichment Program is an intensive and holistic program for IAS Mains 2021 GS papers. We aim to cover 250+ most relevant issues with a 360-degree view, covering all dimensions of each and every topic. Not only you’ll learn and analyze these issues but will also understand how to utilize them via Daily Answer Writing and Mains Test Series.

    REGISTER HERE FOR FREE TO GET 250 IMP TOPIC NOTES & TEST SERIES

    Topic-Wise Current Affairs From An Issue Perspective

    Current affairs in the IAS mains exam must be covered from an ‘issue perspective’ and almost all of them have multiple dimensions to it, various stakeholders involved, have interconnectedness, and can be solved with a multipronged approach only. This should reflect in your answers.

    QEP will help you enrich your pre-existing coverage and will add quality to it. With tests and mentorship, you will get an evaluation and necessary course correction. And we will provide daily answer writing to help you sharpen your answer writing skills and knowledge with our daily initiatives on Habitat.

    Excluding your optional subject, we will be providing topic-wise notes from all the other GS papers for free. This includes Ethics case studies as well!

    REGISTER HERE FOR FREE TO GET 250 IMP TOPIC NOTES & TEST SERIES

    What are some of the topics that will be covered in Quality Assessment Program?

    Unlike Prelims, Mains examinations are lesser dynamic. That’s why we have QEP for Mains and not Prelims. We are not like other dubious institutes who claimed to have figured out the exact paper pattern of Mains 2021. But if you put 2 &2 together, you will know that every paper has nearly 40 topics and we are covering 35 of the most important topics from every paper for Free! (Optional Subjects and Language papers are not included)

    Here are 10 of the most important topics we will be covering

    1. Scrapping of ease of doing Business ranking

    2. Retrospective taxation in India :Issues and Challenges

    3. K vs U shaped economic recovery in India

    4. Governing OTT Platforms

    5. Caste Census and associated issues

    6. Antimicrobial resistance

    7. Changes needed in Reservation system

    8. Departmental Standing committees

    9. Agenda of India in UNSC

    10. India-Australia relations

    REGISTER HERE FOR FREE TO GET 250 IMP TOPIC NOTES & TEST SERIES

  • [Sansad TV] Perspective: India – Russia Annual Summit

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

    Overview

    • The Summit between India and Russia marks the 21st Annual Summit between the two countries after the 2+2 dialogue.
    • This will be the first in-person meeting of the Russian President and PM Modi after 2019.
    • It is in continuation of the tradition of Annual Summits alternately in India and Russia.

    The 2+2 Dialogue

    • It is a strategic conversation between the defense and the foreign ministries of two countries having diplomatic relations.
    • India now has a 2+2 format dialogue mechanism on strategic and security issues with four of its key strategic partners, Russia being the latest.
    • The three others — Australia, the US and Japan — are also ‘Quad’ partners.

    2+2 Dialogue with Russia

    • Russia is one of those countries with which a 2+2 format talk “fits perfectly” in India’s foreign policy.
    • To be sure, the India-Russia 2+2 do have a particularly strong signaling component when seen against the backdrop of the S400 controversy.
    • It can be read as a reminder to Washington that the S400 deal and broader India-Russia defense cooperation will continue, regardless of US concerns.

    Expected outcomes of this Summit

    • There is a propensity towards the signing of agreements between India and Russia in areas of Defence, Trade, Energy and also Space Technology.
    • The Reciprocal Exchange of Logistics (RELOS) Agreement is expected to be signed between the two countries.
    • Both nations have agreed for the manufacture of over six lakh AK-203 assault rifles by a Joint Venture, Indo-Russian Rifles Private Ltd, at Korwa, Amethi, in UP.
    • Both countries will take an attempt to deepen their collaboration with a primary focus on regional security concerns with the return of the Taliban in Afghanistan.

    India-Russia Relations: A backgrounder

    • The relations between Russia and India are an important and privileged strategic partnership.
    • The relationship began with a visit by Indian PM Jawaharlal Nehru to the Soviet Union in June 1955.
    • During the Cold War, India and the Soviet Union (USSR) had a strong strategic, military, economic and diplomatic relationship.
    • After the collapse of the USSR, Russia inherited its close relationship with India resulted in the special relationship.

    The Partnership

    Traditionally, the Indo-Russian strategic partnership has been built on five major components: politics, defense, civil nuclear energy, anti-terrorism cooperation and space.

    (1) Strategic Relations

    • India is the second-largest market for the Russian defence industry.
    • In 2017, approximately 68% of the Indian Military’s hardware import came from Russia, making Russia the chief supplier of defence equipment.
    • It has rose above a buyer-seller relationship with the joint ventures projects.

    (2) Economic Relations

    • Bilateral trade between both countries is concentrated in key value-chain sectors.
    • These sectors include highly diversified segments such as machinery, electronics, aerospace, automobile, commercial shipping, chemicals, pharmaceuticals etc.
    • Both countries set a target of reaching US$30 billion in bilateral trade by 2025.
    • Energy sector is another important area in Indo-Russian bilateral relations.

    Recent trends in bilateral ties

    Despite the best efforts, divergences grew in the bilateral relationships as the underlying structural changes in the international environment are pulling the two nations apart.

    (1) Bilateral divergence

    • While the top leadership of the two nations have continued to engage with each other, divergences have been cropping up with disturbing regularity.
    • For India, what should be concerning is Russia’s increasing tilt towards Pakistan as it seeks to curry favour with China.
    • Moscow had historically supported India at the UNSC by repeatedly vetoing resolutions on the Kashmir issue.

    (2) Military-Defence Complexes

    • Strains are becoming apparent as India moves further along the path of military indigenization and import diversification.
    • India’s procurement from the US and France has also been seen as a heated divergence between the two.
    • This was a result of the unreliability of Russian supplies, as manifested in late arrivals, defective parts, and perennial conflicts overpricing and warranties.

    (3) Cultural Vacuum

    • On an everyday level, while India films and yoga are popular in Russia, no parallel exposure to any aspect of Russian popular culture exists among Indians.
    • This is the most woefully neglected aspect of their relationship, suffering on both sides from lack of funding and, no less important, a shortage of political will.
    • Another aspect of ties is tourism which could be much more vigorous between the two countries than present India’s US affinity

    (4) India-US ties

    • India’s engagement with the US addresses its core concerns regarding regional security.
    • The signing of the long-awaited Communications Compatibility and Security Agreement (COMCASA) is set to elevate the bilateral defence partnership and give India access to advance US defence systems.
    • A closer engagement with the US is a challenge for India, as this relationship is not likely to be a partnership of equals, for the foreseeable future.

    Significance of ties

    (1) Russia needs India as

    • Ukraine conquest: A market for its goods to bypass Western sanctions imposed after its power push in Ukraine.
    • Countering China: Despite its renewed friendship with China, Russia will soon find itself in competition with it as Beijing regards itself as the new G2 along with the US.
    • Against US hegemony: India can help provide the multi-polarity that Russia fiercely seeks.

    (2) India needs Russia because

    • Energy security: An area of special interest for India is the exploration of hydrocarbon reserves along the coast of Russia’s Far East where India has decided to extend a $1 billion Line of Credit.
    • Space collaboration: Despite expanding its purchases from the US, Israel and Europe, India still needs to collaborate with Russia to master future technology including for space.
    • Defence purchases: It improves India’s bargaining power when it negotiates arms sales with the West.
    • Indian exports: Russia can be a major market for Indian industry such as pharmaceuticals, manufactured goods, dairy products, bovine meat and frozen seafood.
    • Geopolitical importance: Russia continues to be a balancing force against any designs China and Pakistan may have in our region.
    • UNSC ambitions: New Delhi needs Moscow’s support in the former’s bid for a permanent seat on the UN Security Council.

    Way forward

    • The recent comprehensive U.S.-India Strategic 2+2 Dialogue is a model to follow.
    • There should be more meetings at the highest state level, regular annual reports on the progress of the working groups, and reinvigorated interactions.
    • India’s cores strength is that it follows an independent foreign policy.
    • On its long way to become a global power, it will likely have to follow a zigzag course, balancing between American demands, long-term friendship with Russia and its own strategic necessities.

  • Repealing AFSPA will strengthen Constitution

    Context

    The killing of 14 civilians in Nagaland in a security operation has sparked debate over the Armed Forces Special Powers Act (AFSPA).

    Case for repeal of AFSPA

    • The repeal of AFSPA is necessary not just for restoring constitutional sanity, but also as a way of acknowledging dark history of our conduct in Nagaland.
    • If the moral case for repealing AFSPA is strong, the political case points in the same direction as well.
    • Need for ensuring individual dignity: The political incorporation of Nagaland (and all other areas where this law applies) will be set back if the guarantees of individual dignity of the Indian Constitution are not extended.
    • Not state of exception: We often describe AFSPA in terms of a “state of exception”.
    • But this theoretical term is misleading. How can a law that has been in virtually continuous existence since 1958 be described as an “exception”.

    Why AFSPA is counterproductive to Army

    • Distortion of choice: First, giving wide immunity to the forces can distort the choice of strategy in counter insurgency operations.
    • Reduce professionalism: Second, wider immunity can often reduce rather than increase the professionalism of the forces.
    • Against federalism: Third, we are constantly in the vicious circle that leads to central dominance in a way that undermines both Indian federalism and operational efficiency.

    Powers and limits under AFSPA

    • The Act grants extraordinarily sweeping powers to the armed forces of search, seizure, arrest, the right to shoot to kill.
    • No blanket immunity: It is true that AFSPA does not grant blanket immunity.
    • The SC guidelines: The Supreme Court laid down guidelines for the use of AFSPA in 1997; and in principle, unprofessional conduct, crimes and atrocities can still be prosecuted.
    • But this will run into two difficulties.
    • Lack of accountability mechanism: As the Jeevan Reddy Committee that advocated the repeal of AFSPA pointed out, the accountability mechanisms internal to AFSPA have not worked.
    • In 2017, the Supreme Court ordered a probe into 1,528 extra-judicial killings in Manipur.
    • At the least, this order seemed to suggest the problems with AFSPA were systemic.
    • But there have apparently been no hearings in this case for three years.
    • Lack of human empathy: At the heart of AFSPA is a profound mutilation of human empathy.
    • Our discourse is a rather abstract one, balancing concepts of human rights and national security.

    Conclusion

    It is high time that all parties come together to repeal AFSPA. It will also be in the fitness of things if all parties got together to acknowledge the trauma in Nagaland and elsewhere. This will strengthen, not weaken, the comatose Indian constitutional project.

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • RBI must tackle surplus liquidity on way to policy normalisation

    Context

    Monetary Policy Committee (MPC) voted to maintain status quo on policy rates, with one member continuing to dissent on the “accommodative” stance of policy.

    What is accommodative stance of policy?

    Accommodative monetary policy is when central banks expand the money supply to boost the economy. Monetary policies that are considered accommodative include lowering the Federal funds rate. These measures are meant to make money less expensive to borrow and encourage more spending.

    Overview of RBI policy measures during Covid-related lockdown

    • Cut in policy rates and injection of liquidity: The RBI had moved proactively to cut the repo and reverse repo rate and inject unprecedented amounts of funds into banks and other intermediaries.
    • The short-term interest rate at reverse repo level: a combination of the lower reverse repo rate and the large liquidity injection had resulted in a drop in various short-term rates down to (and occasionally below) the reverse repo rate, making it the effective operating rate of monetary policy.
    • Gap between repo and reverse repo increased to 65 bps: In addition, both the repo and reverse repo rates had been cut to 4.0 and 3.35 per cent, respectively, with the gap – the “corridor” – between the rates widening from the usual 25 basis points to 65 bps.

    Central bank’s role in modern monetary policy

    • Determining basic overnight interest rate: A central bank’s main role in modern monetary policy operating procedures is to determine the basic overnight interest rate, deemed to be consistent with prevailing macroeconomic conditions and their economic policy objectives, in balancing the ecosystem for sustained growth together with moderate inflation.
    • This is achieved through buying and selling very short-term (predominantly overnight) funds (mainly) from banks to keep a specified operating rate (the weighted average call rate in our case) very close to the policy rate.

    Liquidity management: Key pillar of monetary policy normalisation

    • Liquidity management: Liquidity management in the extended banking and financial system (which includes non-banking intermediaries like NBFCs, mutual funds and others) will now be the key pillar of normalisation.
    • This process is the domain of RBI and not MPC.
    • These operations will be conducted within RBI’s liquidity management framework.
    •  There are two sources of liquidity additions:
    • (i) Exogenous: which are largely due to inflows of foreign currency funds and outflows of currency in circulation (cash) from the banking sector.
    • (ii) Voluntary or endogenous: which is the result of the creation of base money by RBI through buying and selling of bonds, thereby injecting or extracting rupee funds.

    How RBI is managing liquidity surplus?

    • Stopped GSAP and OMOs: Post the October review, RBI had stopped buying bonds under the Govt Securities Asset Purchase (GSAP) and done negligible Open Market Operations (OMOs), thereby stopping addition of voluntary liquidity injection into the system, our own version of “tapering”.
    • Union government balances with RBI, arising from cash flow mismatches between receipts and expenditures, has hybrid characteristics and also impacts liquidity.
    • Use of reverse repo window: RBI has used the reverse repo window to absorb almost all this liquidity surplus from banks.
    • Allowed repaying TLRTOs: It has again allowed banks the option to prepay the outstanding borrowings from the Targeted Long Term Repo Operations (TLTROs), thereby potentially extracting another Rs 70,000 crores.

    How RBI is managing interest rate in the policy normalisation process

    • Increased rates and closed the gap between repo and reverse repo: RBI – post the October review – has gradually guided short-term rates up with a sure hand from near the reverse repo rate to close to the repo rate.
    • It has shifted its liquidity absorption operations from the predominant use of fixed rate reverse repos (FRRR) into (largely) 14-day variable rate reverse repo (VRRR) auctions to guide a rise in interest rates.
    • Since early October, these rates had steadily moved up in a smooth and orderly fashion up to 3.75-3.9 per cent.
    • The VRRR rates moving up have also resulted in various short-term funding interest rates like 90-day Treasury Bills, Commercial Papers (CP) and banks’ Certificates of Deposits (CD) moving up from the reverse repo rate or below in September to 3.5 per cent and higher since December.
    • The OMO and GSAP operations have also helped in managing medium- and longer-term interest rates in the yield curve.

    Way forward

    • There is a likelihood of further additions to exogenous system liquidity.
    • Other instruments to absorb surpluses: There might consequently be a need for other instruments to absorb these surpluses apart from VRRR auctions.
    • Liquidity surplus of non-banking intermediaries: Managing liquidity surpluses of the non-banking intermediaries, especially mutual funds, will be another challenge since they do not have direct access to VRRR operations.

    Consider the question “Since the onset of the Covid-related lockdowns, RBI had moved proactively to cut the repo and reverse repo rate and inject unprecedented amounts of funds into banks and other intermediaries. In this context, what are the challenges in monetary policy normalisation as RBI plans to absorb the excess liquidity and increase the interest rates ?”

    Conclusion

    The shift to the tightening phase, with hikes in the repo rate, is likely towards the late months of FY23, with shifts “if warranted by changes in the economic outlook”.

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

    Back2Basics: Monetary Policy Corridor

    • The Corridor in monetary policy of the RBI refers to the area between the reverse repo rate and the MSF rate.
    • Reverse repo rate will be the lowest of the policy rates whereas Marginal Standing Facility is something like an upper ceiling with a higher rate than the repo rate.
    • The MSF rate and reverse repo rate determine the corridor for the daily movement in the weighted average call money rate.

  • All UPSC-CSE Mains Recommended Candidates, Here’s a Good News!|| Civilsdaily is Providing Free 360° Comphrehensive Notes on 250 Most Important Topics of Mains 2021|| Register Now & Get them for FREE|| Quality Enrichment Program

    All UPSC-CSE Mains Recommended Candidates, Here’s a Good News!|| Civilsdaily is Providing Free 360° Comphrehensive Notes on 250 Most Important Topics of Mains 2021|| Register Now & Get them for FREE|| Quality Enrichment Program

    register here for free to get 250 imp topic notes & test series
    Program starting from the second week of December.

    UPSC CSE Mains 2021 will be conducted on January 2022 and is hardly a month away. It’s time to practice a lot of test series and revise the topics.

    We, at Civilsdaily rose to the occasion and have prepared consolidated notes of the 250 most important topics of Mains 2021. Each topic will have 2-3 pages of notes of material from the standard books and current affairs. They will also have relevant factual data and statistics highlighted in bold for every topic that will help you provide a solid introduction and conclusion.

    And the best news is…. all of this is absolutely free for all Mains selected candidates! Just fill the form right now to request the QEP material and we will get in touch with you with ASAP.

    How Quality Assessment Program be useful right now?

    You might be wondering, with just a month away is it wise to register for any program right now, even for free? You don’t have to worry. The Quality Assessment Program is not new information. It’s consolidated revision notes from the standard books and current affairs of UPSC-CSE Mains.

    Our initiative last year of compiling issues and topics that had a high probability of being asked in Mains 2020 was a thumping success– our toppers said they greatly benefitted from it. One such topper, Lakshay Chowdhary was gracious enough to give us a video testimonial.

    Questions in 2020 Mains came from topics we covered like Pala period, Circum-Pacific zone, Online Education in India, Criminalization in Politics, 16 years of RTI, Microfinance etc.

    Coverage of topics in QEP will have one and only one purpose – to enable you to write great answers for any question from a particular topic. To be able to write a convincing 250 words answer for a topic, you need to know atleast 1-2 pages of content for it.

    At this point in time studying everything is not desirable neither is it feasible. You don’t have time to read everything, segregate what is important and what’s not, make notes, cover different dimensions, and then find a way to utilize that. What you need at this point in time is efficient and organized coverage of the most relevant topics for the IAS mains exam. With QEP we aim to help you achieve all this.

    QEP or Quality Enrichment Program is an intensive and holistic program for IAS Mains 2021 GS papers. We aim to cover 250+ most relevant issues with a 360-degree view, covering all dimensions of each and every topic. Not only you’ll learn and analyze these issues but will also understand how to utilize them via Daily Answer Writing and Mains Test Series.

    REGISTER HERE FOR FREE TO GET 250 IMP TOPIC NOTES & TEST SERIES

    Topic-Wise Current Affairs From An Issue Perspective

    Current affairs in the IAS mains exam must be covered from an ‘issue perspective’ and almost all of them have multiple dimensions to it, various stakeholders involved, have interconnectedness, and can be solved with a multipronged approach only. This should reflect in your answers.

    QEP will help you enrich your pre-existing coverage and will add quality to it. With tests and mentorship, you will get an evaluation and necessary course correction. And we will provide daily answer writing to help you sharpen your answer writing skills and knowledge with our daily initiatives on Habitat.

    Excluding your optional subject, we will be providing topic-wise notes from all the other GS papers for free. This includes Ethics case studies as well!

    REGISTER HERE FOR FREE TO GET 250 IMP TOPIC NOTES & TEST SERIES

    What are some of the topics that will be covered in Quality Assessment Program?

    Unlike Prelims, Mains examinations are lesser dynamic. That’s why we have QEP for Mains and not Prelims. We are not like other dubious institutes who claimed to have figured out the exact paper pattern of Mains 2021. But if you put 2 &2 together, you will know that every paper has nearly 40 topics and we are covering 35 of the most important topics from every paper for Free! (Optional Subjects and Language papers are not included)

    Here are 10 of the most important topics we will be covering

    1. Scrapping of ease of doing Business ranking

    2. Retrospective taxation in India :Issues and Challenges

    3. K vs U shaped economic recovery in India

    4. Governing OTT Platforms

    5. Caste Census and associated issues

    6. Antimicrobial resistance

    7. Changes needed in Reservation system

    8. Departmental Standing committees

    9. Agenda of India in UNSC

    10. India-Australia relations

    REGISTER HERE FOR FREE TO GET 250 IMP TOPIC NOTES & TEST SERIES

More posts