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  • What is Liquefied Natural Gas (LNG), and how it impacts the climate?

    lng

    The EU is weaning itself off piped Russian gas by rapidly expanding imports of liquefied natural gas (LNG) from US.

    What is Liquefied Natural Gas or LNG?

    • LNG is natural gas reduced to a liquid state (liquefaction) through intense cooling to around -161 degrees Celsius (-259 Fahrenheit).
    • It is constituted almost wholly of methane — a potent greenhouse gas and can be transported around the world by ship.
    • This liquid gas is 600 times smaller than the original volume and is half the weight of water.
    • After arriving at its destination, the cargo is regasified in a floating terminal and redistributed through pipelines.

    Economic feasibility of LNG

    • High cost of liquefaction: despite LNG’s export potential, the high cost of liquefaction and producing LNG has limited its market.
    • Losses: Between 10-25% of the energy of the gas is being lost during the liquefaction process.
    • Costly transport: The cooling, liquefying and transport processes, as well as the post-transport regasification procedures, also require a lot of energy.

    What’s the climate impact of LNG?

    • Emission: With LNG creating almost 10 times more emissions than piped gas by one estimate, its rapid expansion will likely compromise climate targets.
    • Risks of methane leakages: Methane loss across the supply chain risks also contributes to LNG’s high emissions.
    • Huge carbon equivalence: Meanwhile, LNG emits 14 times as much carbon as solar power when producing the equivalent amount of energy, and 50 times as much carbon as wind power.

     

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  • What are Additional Tier-1 (AT-1) Bonds?

    The Bombay High Court has quashed the write-off of Additional Tier-1 (AT1) bonds worth Rs 8,400 crore issued by Yes Bank Ltd, bringing relief to investors.

    What are AT1 bonds?

    • AT-1, short for Additional Tier-1 bonds, are a type of unsecured, perpetual bonds that banks issue to shore up their core capital base to meet the Basel-III norms.
    • AT-1 bonds are complex hybrid instruments, ideally meant for institutions and smart investors who can decipher their terms and assess if their higher rates compensate for their higher risks.
    • They carry a face value of ₹10 lakh per bond.
    • There are two routes through which retail folk have acquired these bonds — initial private placement offers of AT-1 bonds by banks seeking to raise money; or secondary market buys of already-traded AT-1 bonds based on recommendations from brokers.

    Why are they important?

    AT-1 bonds have several unusual features lurking in their fine print, which make them very different from plain bonds.

    • One, these bonds are perpetual and carry no maturity date. Instead, they carry call options that allow banks to redeem them after five or 10 years. But banks are not obliged to use this call option and can opt to pay only interest on these bonds for eternity.
    • Two, banks issuing AT-1 bonds can skip interest payouts for a particular year or even reduce the bonds’ face value without getting into hot water with their investors, provided their capital ratios fall below certain threshold levels. These thresholds are specified in their offer terms.
    • Three, if the RBI feels that a bank is tottering on the brink and needs a rescue, it can simply ask the bank to cancel its outstanding AT-1 bonds without consulting its investors. This is what has happened to YES Bank’s AT-1 bond-holders who are said to have invested ₹10,800 crore.

     

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  • 21st Jan 2023 | Prelims Daily with Previous Year Questions

    21st Jan 2023 | Prelims Daily with Previous Year Questions

    [WpProQuiz 1220]

    [WpProQuiz_toplist 1220]

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  • Intra-national COP: An innovative approach of cooperation

    national

    Context

    • India revised its target to reduce the carbon intensity of its GDP to 45 percent by 2030, more ambitious than the earlier target of 34 percent. These National carbon emission targets were globally appreciated and have further strengthened its leadership position in climate action.

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    Spirit of cooperative federalism is needed to achieve this target

    • In order to effectively address climate change, India needs to involve all of its states and Union Territories. During recent climate summits, the states and UTs have not been active participants.
    • A new approach to cooperation between states and UTs on climate action is needed, similar to the cooperation used in the implementation of the Goods and Services Tax (GST). This will lead to better results in public sector actions to tackle climate change.

    Role of states

    • Power of States and UTs: Provisions in the Constitution of India, legislations of the Parliament, executive orders, and judicial decisions enable states/UTs to have a substantial influence on matters pertaining to land, electricity, mobility, labour, pollution control, skill building, law and order, financial incentives for commercial activities, etc.
    • Role of States and UTs in Policy Implementation: States/UTs can become prime movers in the last mile through interventions in policy, regulation, and project implementation.
    • Potential of India’s Cooperative Federalism: During the ongoing winter session of Parliament, the Prime Minister of India also emphasised the potential of India’s cooperative federalism in becoming ‘a torch bearer of the world’ in achieving Sustainable Development Goals (SDGs) while addressing its Rajya Sabha.

    How India’s model of ‘Intranational COP’ will work?

    • Utilizing GST council model for climate action: Climate action is a unifying theme, and creating a forum similar to the Goods and Services Taxes (GST) council, which created successful engagement models during the pan-India roll-out of GST, can be helpful.
    • Facilitating cross-party dialogue: This intra-country group, Intranational COP, can offer opportunities for sharing a stage across parties in a neutral setting where outcome-oriented conversations can take place.
    • Promoting cooperative and competitive federalism for Net Zero: It can kindle the friendly spirit of cooperative and competitive federalism with each state/UT committing to bolder actions towards net zero.
    • Measuring stakeholder performance through consensus building: It can potentially introduce new evaluation parameters for measuring the performance of stakeholders based on their ability to build consensus across boundaries while keeping aside their myopic and constricted vote-bank-centered politics.
    • Learning and Leveraging Best Practices: Climate change is a new and dynamic topic for all stakeholders. It is an equaliser where no state/UT has any inherent advantageous positions. States/UTs can learn best practices from each other to implement, achieve, and measure the outcomes of their actions.

    Electricity distribution: A case of cooperation

    • Today, though a project is conceived, financed, and implemented by central agencies, site-specific mobilisation of resources requires the active cooperation of the states/UTs.
    • An important case in point can be electricity distribution, where states can exponentially augment India’s clean energy ambitions.
    • Furthermore, they can directly support municipal corporations/village panchayats in innovating customised approaches for faster and inclusive adoption of national climate goals in line with the socioeconomic and cultural sensitivities of the region.

    ‘Intranational COP’ for common but differentiated responsibilities

    • Forum for addressing Climate Change within India: It is well-established that some parts of India are economically more developed as compared to others. This translates to the fact that the relatively more prosperous regions contribute more to India’s carbon emissions. Such states are better positioned to initially invest in expensive low-carbon technologies and disseminate them to achieve economies of scale.
    • Addressing Regional Imbalances in Carbon Emissions: IndiaCOP can can unleash creative mechanisms to offset regional imbalances while respecting local cultural sensitivities.
    • Platform for States/UTs to Forge Mutual Cooperation Agreements: It can provide a platform for states/UTs to forge MOUs that complement each other’s strengths while filling up the gaps in technical/financial/people resources. For e.g., small hilly states have good hydroelectric power potential, but they may lack financial wherewithal; states like Rajasthan have good solar energy potential but currently lack sufficient trained manpower, etc.

    Way ahead

    • Intranational COP can be a dedicated flagship platform to thrash out a national consensus on India’s climate goals and the means to achieve them. For example, the Finance Commission can play a role in allocating capital based on the climate actions and needs of states.
    • The mechanisms of climate funding and allocation, led by the Finance Commission, can be debated and agreed upon on this platform. Such a consensus will enjoy double legitimacy as it is arrived at collectively by the union and state/UT governments.

    Conclusion

    • The success of India’s model of “Intra-national COP” can become a template for federal nations across the world to engage with provincial/local governments with diverse socio-political and economic challenges. It can score a big win in promoting India’s soft power, especially as it takes on the presidency of the G20.

    Mains question

    Q. During recent climate summits, the states and UTs have not been active participants. In this backdrop how India’s model of Intra-national COP will be helpful?

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  • Day 6| Daily Answer Wars| CD WarZone

    Topics for Today’s question:

    GS-3 Infrastructure: Energy, Ports, Roads, Airports, Railways etc.       

    Question:

    Q. Why is Public Private Partnership (PPP) required in infrastructural projects? Examine the role of PPP model in the redevelopment of Railway Stations in India. (10 Marks)

     

    HOW TO ATTEMPT ANSWERS IN DAILY ANSWER WARS (DAW)?

    1. Daily 1 question either from General Studies 1, 2, 3 or 4 will be provided via live You Tube video session.
    2. You can write your answer on an A4 sheet and scan/click pictures of the same.
    3. The answer needs to be submitted by joining the telegram group given in the link below.

      https://t.me/cdwarzone

    *In case your answer is not reviewed, reply to your answer saying *NOT CHECKED*. 

    1. For the philosophy of Daily Answer Wars and payment: 
    Daily Answer Wars | CD warzone
    Payment Link DAW

  • Police conference: Highlighting the Challenges and solutions

    conference

    Context

    • A conference of the Directors General of Police of all the states and union territories is being held in Delhi from January 20 to 22. The Prime Minister will be attending all the sessions of the three-day conference.

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    All you need to know about the Conference

    • This conference of the Directors General of Police is an annual feature.
    • It is organised by the Intelligence Bureau and its deliberations are presided over by the Director, IB, who is considered primus inter pares among the senior-most police officers of the country.
    • This year’s conference, according to media reports, will be discussing emerging trends in militancy and hybrid militancy in Jammu and Kashmir, counter-terrorism, cryptocurrency, drug trafficking, radicalisation and other important matters.

    What is missing in the agenda?

    • Problems at grass root are rarely discussed: The agenda, year after year, reflects the security-related problems of the country at the macro level. So far so good. But the grass roots problems are seldom taken up or deliberated upon.
    • Dismal picture of Police stations: The strength of a chain, as they say, is determined by its weakest link, and the weakest link today is the police station. Leaving aside the model police stations and some in the metro cities, the average police station presents a dismal picture dilapidated building, case property like motorcycles and cars littered all over the compound, no reception room, filthy lockup, and so on.
    • Overburdened staff: The staff, overworked and fatigued, is generally unresponsive, if not rude.
    • Available resources are limited resources: They may not have access to vehicles or have run out of fuel as per the allotted quota.
    • Political influence: Even if you are able to speak with a responsible sub-inspector, they may be pressured by politicians to change their actions.

    For instance: The data according to the Status of Policing in India Report 2019

    • Shortage of personnel: According to the report, police in India work at 77% of their sanctioned strength and these personnel work for 14 hours a day on average.
    • Lack of equipment and technology: There are 70 police stations which have no wireless, 214 police stations that have no telephone and 240 police stations that have no vehicles.
    • Poor housing and training facilities: Housing facilities for police are unsatisfactory. Training of personnel is inadequate, the training institutions have not kept pace with the changing paradigm on the law or crime front and are manned generally by unwanted, demotivated officers.
    • Technology gap: Technology support leaves much to be desired; the criminals are, in fact, way ahead of the police.

    Hard fact and the concerns over the police duties in India

    • Police Officer’s Duties and Expectations: The demanding role and expectations of police officers as first responders to any crime, 24/7 duty and assisting other departments with their duties. The public has no obligation to assist police officers. For instance, ASI was stabbed to death in Delhi, bystanders were just standing and watching the scene.
    • High death toll among Police Personnel: It is estimated that 36,044 police personnel have died in the performance of their duties since India’s independence. It is pointed out that the corresponding figure for all the countries of Europe taken together is much less.
    • Duties to become more challenging in future: It is acknowledged that police duties in India are tougher than in any other part of the world, and that these duties are likely to become even more challenging in the future, with the rise of new forms of crime such as terrorist crimes, cybercrimes, drug trafficking, and cryptocurrency.

    What improvements are suggested?

    1. The Need to Prioritize Basic Matters: It is important to prioritize basic police matters and ensure that they are effectively dealt with. Once the police station is able to inspire confidence among the people, many other issues will fall into place.
    2. Division of Conference into Two Parts: The format of police conferences should be changed by dividing it into two parts – one dealing with intelligence matters and the other dealing with crime and law and order issues.
    3. Roles of DBI and CBI: It is proposed that the Director of Intelligence Bureau (DIB) preside over the intelligence-related matters, and the Director of Central Bureau of Investigation (CBI) assisted by a senior-most Director General of a state police nominated by the Ministry of Home Affairs should conduct the proceedings of the conference dealing with crime and law and order matters.
    4. Need for Specialized Treatment of Crime: the crime is becoming increasingly complex and requires specialized treatment, and that this bifurcation is necessary in order to effectively address the different aspects of crime.

    Do you know the concept of SMART police?

    • The Prime Minister Narendra Modi introduced the concept of SMART Police.
    • SMART stands for: S: Strict but sensitive, M: Modern and mobile, A: Alert and accountable, R: Reliable and responsive, and  T: Trained and tech-savvy.
    • It also aims to make the police more responsive to the needs of the people, and to address issues of police brutality, corruption, and lack of accountability to citizens.

    Conclusion

    • The Prime Minister’s concept of SMART Police, which aims to create a force that is strict and sensitive, modern and mobile, alert and accountable, reliable and responsive, techno-savvy and trained, has the potential to bring about a significant change in the working of the police and a new era for the people of the country. It’s important for the conference to review the progress made in implementing this transformation in the police and work towards achieving these objectives to bring about a much-needed change in the police force.

    Mains question

    Q. What are the major challenges faced by the Indian police force? Discuss improvements suggested to address them?

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  • [Burning Issue] Storm of ChatGPT

    Context

    ChatGPT, which was only released a few months ago, is gaining popularity online as users marvel at its incredible powers. The latest artificial intelligence tool is creating a buzz among computer scientists and programmers due to its creative capabilities.

    In this context, this edition of the burning issue will elaborate on this latest buzz in the technology sector- ChatGPT

    What is ChatGPT?

    • About ChatGPT: ChatGPT (Generative Pre-trained Transformer) is a chatbot launched by OpenAI in November 2022. It is built on top of OpenAI’s GPT-3 family of large language models and is fine-tuned with both supervised and reinforcement learning techniques.
    • OpenAI: ChatGPT has been developed by OpenAI, which is a research institute and company that focuses on developing artificial intelligence technology responsibly and safely. It was founded in 2015 by a group of entrepreneurs and researchers, including Elon Musk, Sam Altman, and Greg Brockman.
    • A human-like language model: ChatGPT is built on a large-scale transformer-based language model that is trained on a diverse dataset of text and is capable of generating human-like responses to prompts. It is based on GPT-3.5, a language model that uses deep learning to produce human-like text.
    • It is more engaging with details: However, while the older GPT-3 model only took text prompts and tried to continue on that with its own generated text, ChatGPT is more engaging. It’s much better at generating detailed text and can even come up with poems.
    • Keeps the memory of the conversations: Another unique characteristic is memory. The bot can remember earlier comments in a conversation and recount them to the user.
    • Human-like resemblance: A conversation with ChatGPT is like talking to a computer, a smart one, which appears to have some semblance of human-like intelligence.

    The evolution of ChatGPT

    • Generative Pre-Training (GPT) language model: ChatGPT follows a generation of language models that were released by OpenAI in 2018. In 2018, OpenAI released the Generative Pre-Training (GPT) language model. Here, generative means that it is a type of neural network that can create new content based on input content called Training Data. This technology makes it suitable for creative tasks like writing a new story.
    • Transformer technique: With the transformer technique mentioned above, GPT was improved and “Generative Pre-trained Transformer 2” or GPT-2 was released in 2019. GPT-3 with even more sophisticated neural networks was launched in 2020.
    • GPT3.5: In early 2022, GPT3.5 was released and ChatGPT is a successor to GPT3.5. Each successive generation is more advanced than its predecessor. For example, GPT-3 was trained with 175 billion parameters. These large language models have looked at almost all text available on the internet and many other text documents, thereby making them highly informed. Finally, ChatGPT was launched in November 2022.

    About Chatbots and AI

    What is a ChatBot?

    • A chatbot (coined from the term “chat robot”) is a computer program that simulates human conversation either by voice or text communication, and is designed to help solve a problem.
    • Organizations use chatbots to engage with customers alongside classic customer service channels like phone, email, and social media.

    What is Artificial intelligence?

    • AI is a constellation of technologies that enable machines to act with higher levels of intelligence and emulate the human capabilities of sense, comprehend and act. Thus, computer vision and audio processing can actively perceive the world around them by acquiring and processing images, sound and speech.
    • Natural language processing and inference engines can enable AI systems to analyze and understand the information collected.
    • An AI system can also take action through technologies such as expert systems and inference engines or undertake actions in the physical world.
    • These human-like capabilities are augmented by the ability to learn from experience and keep adapting over time.

    Working of ChatGPT

    • ChatGPT is what is called a Language Model, rather than a chatbot. A language model is a software that prints out a sequence of words as output that are related to some words given as input with appropriate semantic relation;
    • in practical terms, it means that it can perform tasks like answering questions and carrying on a conversation with humans. It is often used in natural language processing (NLP) applications, such as speech recognition, automatic translation, and text generation.
    • It is also a neural network. A neural network can be thought of as a large network of computers that can fine-tune its output of words based on the feedback given to it during stages of training: this training process and the technology together are called Reinforcement Learning.
    • With a further refining technique called “Transformer”, a neural network can accurately “understand” the context of a sentence or a paragraph. This “comprehension” can be used for multiple purposes like answering a question, summarising a paragraph or an article, translating documents and so on.

    Applications of ChatGPT

    • A virtual study mate: ChatGPT could be used to generate practice questions or prompts for students to use when studying or preparing for exams. Input a prompt into ChatGPT that relates to the topic you are studying. For example, you might write ‘generate practice questions from Indian Polity on fundamental rights’. ChatGPT will then generate a series of practice questions that could range from multiple choice, true/false, or short answers.
    • A writing assistant: ChatGPT can be used to generate text in a variety of styles and formats, such as stories, news articles, poems, and more. This could be useful for creative writing, or for generating content for websites and social media.
    • A human-like search engine: One of the most used applications of ChatGPT is to answer specific questions and get answers in human talking style-dialogue format. It can also simplify complex theories. Microsoft is planning to integrate OpenAI’s ChatGPT chatbot into its Bing search engine in order to take advantage of its ability to respond to a wide range of questions while mimicking human conversation styles.
    • For language translation: ChatGPT could be used to automatically translate text from one language to another, making it easier for people to communicate with each other across language barriers.
    • A customizable chatbot: You could use the ChatGPT model to create a chatbot that can answer questions or have a conversation with a user. ChatGPT could answer customer questions or provide assistance in online chatbots or virtual assistants, allowing businesses to provide 24/7 support to their customers. It is trainable with specific data to create a virtual customer service bot that can converse and respond to queries.

    Advantages

    • Available for customers 24/7: ChatGPT could answer customer questions at any hour, day or night. Now, the customer can ask a query to the chatbot and get an instant reply or get sent to the page with the right product. 
    • Offers Better personalization: Personalization is important for customers. In fact, about 44% of buyers become repeat customers after receiving a personalized experience. It pays off to customize your messages to clients and provide more personalized customer service. 
    • Faster response time: About 96% of shoppers expect a response within five minutes. And chatbots like ChatGPT can provide instant responses to help customers with simple questions right there and then. This helps to decrease the waiting time for customer support to a couple of seconds. 
    • Increase sales: Chatbots can bring more sales for businesses. Bots turn first-time website visitors into new customers by showing off your new products and offering discounts to tempt potential clients.
    • Save costs: Cost saving is another essential benefit. It can automate day-to-day tasks that include everything from answering FAQs to booking appointments. This allows the customer support team to concentrate on more complex queries. 

    Concerns and Limitations

    • Implications for cybersecurity: Check Point Research and others noted that ChatGPT was capable of writing phishing emails and malware, especially when combined with OpenAI Codex.
    • May involve in unethical use: ChatGPT attempts to reject prompts that may violate its content policy. However, some users managed to jailbreak ChatGPT by using various prompt engineering techniques to bypass these restrictions in early December 2022 and successfully tricked ChatGPT into giving instructions for how to create a Molotov cocktail or a nuclear bomb, or into generating arguments in the style of a Neo-Nazi.
    • ChatGPT is not entirely accurate: It is not entirely accurate, something even OpenAI has admitted. It is also evident that some of the essays written by ChatGPT lack the depth that a real human expert might showcase when writing on the same subject.
    • ChatGPT lacks depth like the human mind: It doesn’t quite have the nuance that a human would often be able to provide. For example, when asked ChatGPT how one should cope with a cancer diagnosis. The responses were kind but generic. The type of responses you would find in any general self-help guide.
    • It lacks the same experiences as humans: AI has a long way to go. After all, it doesn’t have the same experiences as a human.
    • ChatGPT does not excel in code: ChatGPT is writing basic code. As several reports have shown, ChatGPT doesn’t quite excel at this yet. But a future where basic code is written using AI doesn’t seem so incredible right now.
    • ChatGPT is still prone to Misinformation: Despite of abilities of the bot, there are some limitations. ChatGPT is still prone to misinformation and biases, which is something that plagued previous versions of GPT as well. The model can give incorrect answers to, say, algebraic problems.
    • ChatGPT can write incorrect answers: OpenAI understands some flaws and has noted them down on its announcement blog that “ChatGPT sometimes writes plausible-sounding but the incorrect or nonsensical answer

    Conclusion

    • OpenAI’s ChatGPT turned that simple experience into something entirely different. ChatGPT is a path-breaking example of an AI chatbot and what the technology could achieve when applied at scale.
    • Limitations aside, ChatGPT still makes for a fun little bot to interact with. However, there are some challenges that need to be addressed before it becomes an unavoidable part of human life.

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  • Women to get Command Roles in the Indian Army

    women

    As many as 108 women officers in the Army are set to be cleared for the rank of Colonel (selection grade) which will make them eligible to command units and troops in their respective arms and services for the first time.

    What exactly does Commanding a unit mean?

    • Once promoted to a Colonel, an officer is eligible to command troops directly in the Army, which is an acknowledgment of the leadership qualities of the officer.
    • It is considered a coveted appointment because in no other rank — including higher ranks like Brigadier or Major General — does an officer interact directly with troops on the ground.
    • Women officers in many streams of the Army, including the Army Air Defence, Signals, Engineers, Army Aviation, EMEs, Army Ordnance Corps, and Intelligence Corps will be commanding units.

    Women in commands: Significance

    • Leadership opportunity: Despite working at the grassroots level as junior officers, women officers hitherto did not get an opportunity to prove their leadership skills as they were not eligible to command a unit.
    • Gender parity: Most importantly, it grants women officer’s parity with their male counterparts.
    • Higher ranks: Earlier promotions were staff appointments — which are more administrative in nature and not purely command appointments in which an officer commands troops on ground.
    • Benefits after permanent commission: With a longer career in the Army, women officers will be considered for promotions, including to the rank of Colonel and beyond.

    Why did their Colonel promotions come so late?

    • An officer in the Army is promoted to the rank of Colonel only after serving between 16 and 18 years, based on certain criteria such as annual confidential reports and various courses.
    • Women officers who were inducted into the Army were inducted as Short Service Commission (SSC) officers in 1992 and in the years after did not have the choice to opt for permanent commission.

    Supreme Court order affirming Permanent Commission

    • In 2019, the Army changed its rules allowing SSC women officers to opt for permanent commission who would have otherwise retired after 14 years of service.
    • However, this was not retrospective and applied only to the batches of women officers starting their career in the Army in 2020.
    • With the landmark Supreme Court judgment of February 2020, permanent commission was granted to women officers with retrospective effect.
    • This opened the doors for their further growth and promotions in the Army, which has been of late opening leadership and higher management courses for women.

    How are women still discriminated?

    • Women are still not eligible in core combat arms such as Infantry, Mechanised Infantry and Armoured Corps.
    • Indian Army is not open to women fighting wars at the borders as foot soldiers.
    • Much of this resistance stems from past instances of male soldiers being taken as prisoners of war and tortured by the enemy.
    • However, the Army has recently decided to open the Corps of Artillery, a combat support arm, to women.

    What about the Indian Navy and the Indian Air Force?

    • Women officers have been inducted into all branches of the Navy, and they will be eligible for permanent commission in the future.
    • Women officers can command shore-based units and, as they join the service and become eligible for permanent commission, they would be able to command ships and air squadrons.
    • The IAF has opened all branches for women officers, including the fighter stream and the new weapon systems branch.
    • As they are granted permanent commission based on eligibility and vacancies, they will be eligible to command units in the future.

    How many women serve in the Indian armed forces?

    • The Army, being the largest of the three services, has the largest number of women officers at 1,705, followed by 1,640 women officers in the IAF, and 559 in the Navy.
    • This data was submitted by the government to Parliament last year.

     

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  • Forex Reserves zoom by $10.417 billion to $572 billion

    India’s forex reserves zoomed by $10.417 billion to $572 billion, making it one of the biggest weekly jumps in recent times.

    Recent trends in FOREX Reserves

    • In the previous reporting week, the overall reserves had dropped by $1.268 billion to $561.583 billion.
    • In October 2021, the country’s forex reached an all-time high of $645 billion.
    • The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments.
    • In October 2022, the reserves had swelled by $14.721 billion during a week.

    What is Foreign Exchange (Forex) Reserve?

    • Foreign exchange reserves are important assets held by the central bank in foreign currencies as reserves.
    • They are commonly used to support the exchange rate and set monetary policy.
    • In India’s case, foreign reserves include Gold, Dollars, and the IMF’s quota for Special Drawing Rights.
    • Most of the reserves are usually held in US dollars, given the currency’s importance in the international financial and trading system.
    • Some central banks keep reserves in Euros, British pounds, Japanese yen, or Chinese yuan, in addition to their US dollar reserves.

    India’s forex reserves cover:

    1. Foreign Currency Assets (FCAs)
    2. Special Drawing Rights (SDRs)
    3. Gold Reserves
    4. Reserve position with the International Monetary Fund (IMF)

    Countries with the highest foreign reserves

    • Currently, China has the largest reserves followed by Japan and Switzerland.
    • India earlier overtook Russia to become the fourth-largest country with foreign exchange reserves. (Data from August 2022)
    1. China – $3,349 Billion
    2. Japan – $1,376 Billion
    3. Switzerland – $1,074 Billion
    4. Russia – $597.40 Billion

    Why are these reserves so important?

    • All international transactions are settled in US dollars and, therefore, required to support India’s imports.
    • More importantly, they need to maintain support and confidence for central bank action, whether monetary policy action or any exchange rate intervention to support the domestic currency.
    • It also helps to limit any vulnerability due to sudden disturbances in foreign capital flows, which may arise during a crisis.
    • Holding liquid foreign currency provides a cushion against such effects and provides confidence that there will still be enough foreign exchange to help the country with crucial imports in case of external shocks.

    Initiatives taken by the government to increase forex

    • To increase the foreign exchange reserves, the Government of India has taken many initiatives like AatmaNirbhar Bharat, in which India has to be made a self-reliant nation so that India does not have to import things that India can produce.
    • Other than AatmaNirbhar Bharat, the government has started schemes like Duty Exemption Scheme, Remission of Duty or Taxes on Export Product (RoDTEP), Nirvik (Niryat Rin Vikas Yojana) scheme, etc.
    • Apart from these schemes, India is one of the top countries that attracted the highest amount of Foreign Direct Investment, thereby improving India’s foreign exchange reserves.

     

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  • PM greets people on Statehood day of Tripura, Manipur, Meghalaya

    state

    Prime Minister has greeted people of three northeast states- Tripura, Manipur and Meghalaya on their Statehood Day.

    What is the news?

    • Today marks the 51st anniversary of the formation of the states, which were created on this day in 1972.
    • While Manipur and Tripura were princely states which were absorbed into India in October 1949, Meghalaya, on the other hand, was part of Assam.
    • The states came into being the North-Eastern Areas (Reorganisation) Act, 1971, enacted on December 30 that year.

    Quick backgrounder

    • These states attained statehood under the North Eastern Region (Reorganization) Act of 1971.
    • The NE composition consisted of Assam plains from the old Assam Province, the hill districts, and the North Eastern Frontier Tracts (NEFT) of the North-Eastern borderland.
    • Later on the NE region was turned into seven sisters with the statehood of Manipur, Tripura, Meghalaya, Assam, Mizoram, Arunachal Pradesh, and Nagaland.

    [1] Meghalaya

    • Apart from accounts of the more essential Khasi kingdoms in the chronicles of the neighbouring Ahoms and Kacharis, little is known of Meghalaya prior to the British rule.
    • However, in the early 19th century, the British desire to build a road through the region to link Bengal and Assam led to a treaty with the ruler (Syiem) of the Khasi principality of Nonkhlaw.
    • In 1829, opponents of the treaty persuaded the Syiem to repudiate it, and a subsequent attack on Britishers led inevitably to its military operations against the Khasis.
    • By the mid-1830s, most local rulers had submitted to the British.
    • For the next century, the British exercised its political control over the area, then known as the Garrows and Cossiya (Khasi) States, but the tribals who were left to fend themselves managed to preserve their traditional culture in seclusion.

    Integration into India

    • In 1947, the rulers of the region acceded to the newly independent India.
    • The first PM Nehru evolved a policy to preserve and protect the culture of the tribal people.
    • The region was given special protection in the Indian constitution along with other tribal areas, and it retained a great deal of autonomy.
    • In 1960, when Assamese became the state’s official language, agitation for autonomy and self-rule gathered strength.
    • Unlike many other hill regions in north-eastern India, this movement was largely peaceful and constitutional.
    • In 1970, Meghalaya became an autonomous state within Assam and achieved full statehood on January 21, 1972.

    [2] Manipur

    • Over 500 princely states had negotiated their accession to the Indian union before independence.
    • According to News Nine, the rulers of these states signed a document called the ‘Instrument of Accession’.
    • On August 11, 1947, Bodhachandra Singh, then Maharaja of Manipur, signed the document. He had been assured that the autonomy of Manipur would be maintained.
    • Elections were held in Manipur in June 1948, but its legislative assembly had differences of opinion on the merger.
    • However, the Maharaja signed a Merger Agreement with India in September 1949.

    [3] Tripura

    • Maharajas of the Manikya dynasty ruled the former princely state of Tripura.
    • It was an independent administrative unit under the Maharaja even during British rule in India.
    • However, according to Tripura State Portal, this independence was qualified, subject to the Britishers’ recognition, as the paramount power of each successive ruler.
    • As per Rajmala, in the royal chronology of Tripura, around 184 kings ruled over the state before it merged with the Indian Union on October 15, 1949.
    • Since then, the history of Tripura has been interspersed with various political, economic and social developments.

    Attainment of full statehood

    • On January 26, 1950, Tripura was accorded the status of a ‘C’ category state, and on November 1, 1956, it was recognized as a Union Territory.
    • With its people’s sustained efforts and struggle, it gained full statehood on January 21, 1972, as per the North-East Reorganisation Act, 1971.
    • Its democratic set-up further stretched to the village level in 1978 with an election to the local bodies that ultimately culminated in introducing a three-tier Panchayati Raj System.

     

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