SJVN Limited has won two prestigious awards at the 15th Construction Industry Development Council (CIDC) Vishwakarma Awards 2024, for their Corporate Social Responsibility (CSR) initiatives.
About CIDC Vishwakarma Awards
The CIDC Vishwakarma Awards is one of the most esteemed recognitions within the construction sector.
It was launched in the year 2005.
The awards are named after Vishwakarma, the divine architect and engineer in Hindu mythology, symbolizing craftsmanship, creativity, and skill in construction.
Key details about the Award
Organizer: The awards are organized by the Construction Industry Development Council (CIDC), which is a body established by the GoI to promote the construction industry’s development and growth.
Categories: The awards cover a wide spectrum of categories, including:
Construction Projects: Recognizing outstanding projects across different sectors such as residential, commercial, infrastructure, and industrial construction.
Construction Technologies: Honoring innovative technologies and techniques that enhance construction processes, efficiency, and sustainability.
Construction Equipment: Acknowledging advancements in construction machinery, tools, and equipment.
Health, Safety, and Environment: Recognizing initiatives and practices that prioritize worker safety, environmental protection, and sustainability in construction.
Individual Achievements: Celebrating the contributions of professionals and leaders who have made significant impacts in the construction industry.
Others: Additional categories may include awards for sustainability, CSR initiatives, and emerging trends in construction.
PYQ:
[2020] In rural road construction the use of which of the following is preferred for ensuring environmental sustainability or to reduce carbon footprint?
1. Copper slag
2. Cold mix asphalt technology
3. Geotextiles
4. Hot mix asphalt technology
5. Portland cement
Select the correct answer using the code given below:
(a) 1, 2 and 3 only
(b) 2, 3 and 4 only
(c) 4 and 5 only
(d) 1 and 5 only
Back2Basics: Corporate Social Responsibility (CSR)
Description
What is it?
Self-regulating business model for social and environmental impact.
Regulation in India
Mandated under Companies Act, 2013 (amendment in 2014).
Investment Areas
Promote rural development, healthcare, education, environment, etc.
CSR Committee
Mandatory for companies meeting Rs 500 Cr net worth or Rs 1000 Cr turnover criteria.
Spending Requirement
At least 2% of average net profits of the last three financial years.
Applicability Criteria
Net worth >= Rs 500 Cr, Turnover >= Rs 1000 Cr, or Net profit >= Rs 5 Cr.
Adjustment for New Cos.
Use average net profits of preceding years to calculate spending.
Applicability Period
Applies before the completion of three financial years for companies.
The US Federal Reserve recently announced stricter bank capital requirements known as the “Basel III endgame” proposal.
What is Bank Capital?
Bank capital is a measure of bank shareholders’ investment in the business.
In contrast to deposits or money a bank has borrowed, capital does not have to be paid back.
In other words, it is a cushion or buffer that protects a bank from insolvency—and, thus, reduces the risk that a bank failure triggers system-wide financial instability.
A bank that has sufficient capital can cover customers’ deposits even if the loans it has made aren’t repaid or if its investments drop in value.
What are Basel Norms?
Basel, Switzerland, hosts the Bureau of International Settlement (BIS), fostering collaboration among central banks to establish global banking standards.
The Basel Committee on Banking Supervision (BCBS), established in 1974 formulates broad supervisory guidelines known as the Basel framework.
Its purpose is to ensure banks maintain adequate capital to meet obligations and absorb losses.
India has adopted Basel standards to align its banking practices with global norms.
Description
Basel I
Introduced in 1988.
Known as the Basel Capital Accord.
Focused on credit risk.
Set a minimum capital requirement of 8% of risk-weighted assets (RWA).
Assets were assigned risk weights based on their risk profile.
Adopted by India in 1999.
Basel II
Published in June 2004.
Aimed to refine and reform Basel I.
Introduced three pillars:
Capital Adequacy Requirements
Supervisory Review
Market Discipline
Increased focus on risk management and disclosure.
Designed to promote a more resilient banking system.
*Basel IV
In 2017, the Basel Committee agreed on changes to the global capital requirements as part of finalising Basel III.
The changes are so comprehensive that they are increasingly seen as an entirely new framework, commonly referred to as “Basel IV”.
Set to take effect under transition rules from 2025.*
Proposed Changes under Basel III Endgame
Expansion of Scope: The proposal aims to extend the strictest risk-based capital approach to more banks, lowering the asset threshold from $700 billion to $100 billion. This would encompass around 37 large banks in the U.S.
Standardized Measure for Capital Requirements: Regulators propose curtailing banks’ use of internal models to calculate capital requirements for loans, advocating for a standardized measure for all banks to ensure uniform risk assessment.
Increased Capital for Trading and Operational Risks: The proposal mandates higher capital reserves for risks linked to trading activities and operational challenges, requiring banks to utilize standard models for risk assessment instead of internal ones.
Changes to Capital Calculations for Portfolios: Banks with assets exceeding $100 billion must reflect gains and losses in portfolios categorized as “available for sale” in their capital calculations, aiming for a more precise depiction of a bank’s risk exposure.
Challenges created by the new Norms
Operational Risks: A substantial portion of the proposed capital increment targets banks’ operational risks, encompassing potential losses arising from internal processes, people, systems, or external events.
Non-Traditional Banking Activities: Entities engaged in trading, market-making, wealth management, and investment banking, will face more pronounced capital requirements due to altered risk assessment and operational risk calculations.
Industry-specific Concerns: Additionally, specific industries, like renewable energy, anticipate repercussions, fearing that increased capital requirements could undermine the effectiveness of tax incentives for projects targeting climate change.
Arguments in Favor of Increasing Capital
Financial Stability: Proponents argue that heightened capital requirements are imperative for safeguarding financial stability, averting bank failures, and minimizing the need for government bailouts.
Prudent Banking Practices: They contend that current standards inadequately address bank risks and that increased capital incentivizes prudent banking practices.
Resilient Banking System: Economists suggests that the social costs of higher capital requirements are minimal compared to the benefits of a more resilient financial system.
PYQ:
2015:
‘Basel III Accord’ or simply ‘Basel III’, often seen in the news, seeks to:
(a) Develop national strategies for the conservation and sustainable use of biological diversity
(b) Improve banking sector’s ability to deal with financial and economic stress and improve risk management
(c) Reduce the greenhouse gas emissions but places a heavier burden on developed countries
(d) Transfer technology from developed countries to poor countries to enable them to replace the use of chlorofluorocarbons in refrigeration with harmless chemicals
Practice MCQ:
What is the primary objective of “Basel III Endgame” in the banking sector?
(a) To encourage speculative investments by banks to boost short-term profits.
(b) To ensure the stability of the global financial system by strengthening the regulation, supervision, and risk management practices of banks.
(c) To encourage banks to invest more in less-risky assets to stimulate economic growth.
(d) To limit the role of central banks in regulating commercial banks and promote market-driven banking practices.
Mains: Q. Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements. (UPSC CSE 2023)
Prelims:
Q. Disguised unemployment generally means (UPSC CSE 2013)
(a) large number of people remain unemployed (b) alternative employment is not available (c) marginal productivity of labour is zero (d) productivity of workers is low
Note4Students:
Mains: Social Issues; Population; Unemployment;
Mentor comments: Unemployment/Underemployment is the most contentious issue that continues to be a challenge for the Socioeconomic landscape of India. As one of the world’s most populous nations with a diverse workforce, fluctuations in the unemployment rate have far-reaching implications for the country’s growth and development. So, we need to analyze the current status of India’s Dynamic Population. The recently published, India Employment Report 2024 is the third in a series of regular publications by the ILO on labor and employment issues. This report on Youth Employment, Education, and Skills examines the challenge of youth employment in the context of the emerging economic, labor market, educational, and skills scenario in India and changes over the past two decades.
Let’s learn.
—
Why in the News?
The recent India Employment Report (IER) 2024 Report by the Institute for Human Development and International Labour Organization (ILO) poses questions on the trickle-down effect of employment.
Key highlights of the IER 2024 Report:
Poor Employment Conditions:
The overall labor force participation and employment rates are reflecting issues such as stagnant or declining wages, increased self-employment among women, and a higher proportion of unpaid family work among youth.
The share of the young population with secondary or higher education in the total unemployed has almost doubled from 35.2% in 2000 to 65.7% in 2022.
Youth Employment Challenges:
Youth employment and underemployment surged between 2000 and 2019, with educated youths experiencing significantly higher levels of joblessness.
The Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR), and the Unemployment Rate (UR) showed a long-term deterioration between 2000 and 2018 but witnessed an improvement after 2019.
Widening Regional Gaps: Significant states consistently rank lower in employment indicators. For example, states like Bihar, Uttar Pradesh, Odisha, Madhya Pradesh, Jharkhand, and Chhattisgarh have struggled with poor employment outcomes over the years, reflecting the influence of regional policies.
Case Study from Kolkata:
A study conducted in 37 slums across Kolkata in 2012 and revisited in 2022-23 found that the major occupations in slums have remained the same over the decade, with a significant proportion of the working population engaged in unskilled labor. The share of employment in skilled and semi-skilled labor and private organizations decreased between 2012-19, while employment in petty businesses or small shops increased by 9%. The study also found that employment in truck driving and cleaning, and construction and related work gained momentum in the last 10 years.
Widening Gender Gaps:
India is facing low rates of female labor force participation.
Although educational attainment has improved across all groups, social inequalities persist despite affirmative action and targeted policies, with Scheduled Castes and Scheduled Tribes facing barriers to accessing better job opportunities.
Informal Employment challenges: Although non-farm employment growing faster than farm employment before 2018, it has not grown sufficiently to absorb workers from agriculture. Around 90% are engaged in informal work, especially after 2018 it is increased.
Lack of necessary skills: 75% of workers are unable to send emails with attachments, 60% are unable to copy and paste files, and 90% are unable to perform basic spreadsheet tasks like putting a mathematical formula.
Declining Wages of Casual Workers:
While wages of skilled laborers maintained a modest upward trend during 2012–22, wages have remained low for unskilled workers.
As much as 62% of the unskilled casual agricultural workers and 70% of such workers in the construction sector at the all-India level did not receive the prescribed daily minimum wages in 2022.
No Security to Industrial Workers: Recently, online platforms and gig workers have been expanding, but it is, to a large extent, the extension of informal work, with hardly any social security provisions.
Trends in Regional Migration:
India is expected to have a migration rate of around 40% in 2030 and will have an urban population of around 607 million.
The present pattern of migration also shows regional imbalance in the labor markets.
Usually, migration in India is seen from the eastern, north-eastern, and central regions to southern, western, and northern regions.
What are the suggestive measures given by ILO?
To address labour market disparities:
Enhance women’s participation.
Integrate high-quality skills training to uplift economically disadvantaged groups.
Promote a fair labour market.
To enhance our focus on enhancing Employment:
Working on macroeconomic policies especially manufacturing sector.
Supporting MSMEs through a decentralized approach.
Increase agricultural productivity.
Building a sustainable economy.
To enhance job quality and build strategies:
Building robust labor Policy.
Promote Digital economy.
Focusing on sustained urban culture and migration policy.
Recently, the SC rejected Kerala’s plea for immediate relief in its case urging the Union government to ease borrowing constraints, allowing the state to secure extra funds in the ongoing fiscal year.
State governments receive funds from three sources:
Own revenues (tax and non-tax)
Transfers from the Union government as shares of taxes and as grants
Market borrowings
Fiscal Demands for Extra Funds:
Increased Expenditure: In 2020-21, the Kerala government sharply increased its spending to 18% of its GSDP, to provide economic relief in the wake of the COVID-19 pandemic, aided by the relaxation in borrowing norms then
Central Gov transfers to Kerala declined: As ratios of GSDP, the Union government’s transfers to Kerala declined to 2.8% in 2023-24, significantly lower than previous years, even as the State’s revenues remained at around 8.0%.
This meant that, in 2023-24, the State government could meet its modest budget expenditure, equivalent to 14.2% of GSDP, only by raising the borrowing to 3.4% of the GSDP
Socio-Economic for Extra Funds:
Aging Population: Kerala, like many other states, faces the challenge of an aging population, which puts pressure on pension funds and healthcare systems, necessitating long-term financial planning and investment.
Pension Liabilities: The substantial outgo for pensions poses a financial burden on the state’s budget, requiring strategies for sustainable pension management to ensure fiscal stability.
Youth Outmigration: Kerala experiences significant outmigration of its youth, leading to a loss of productive workforce and potential tax revenues, highlighting the need for policies to retain skilled workers and stimulate economic growth
About Net Borrowing Ceiling (NBC):
The net borrowing ceiling for states in India denotes the maximum threshold set on the funds that state governments can borrow within a fiscal year.
Significance: Ensuring fiscal discipline and preventing states from accumulating excessive debt, the net borrowing ceiling plays a pivotal role.
Factors: The criteria for setting these limits are shaped by various factors such as inputs from the Finance Commission, the Fiscal Responsibility and Budget Management (FRBM) Act, and specific directives from the central government, notably the Ministry of Finance.
Basis of the Net Borrowing Ceiling:
Fiscal Responsibility Legislation: Both the central and state governments in India adhere to the FRBM Act, which establishes fiscal deficit goals to uphold fiscal discipline. Under the FRBM, states are required to maintain a fiscal deficit limit of 3% of the Gross State Domestic Product (GSDP).
Central Government Guidelines: The central government, through the Department of Expenditure in the Ministry of Finance, sets the annual borrowing limits for each state based on a formula that considers the state’s GSDP, existing debt levels, fiscal discipline, and other relevant factors. These limits can be revised in response to special circumstances, such as natural disasters or significant economic downturns.
Finance Commission Recommendations: The Finance Commission, which is constituted every five years, recommends how the central taxes are to be divided between the centre and the states and suggests measures to maintain fiscal stability. It also provides recommendations regarding the borrowing limits of states.
Conclusion: States need to put in place an effective forecasting and monitoring mechanism for cash inflows and outflows so that a need-based approach is followed for market borrowings and the interest cost of cash surpluses is minimized.
Mains PYQ
Q What were the reasons for the introduction of Fiscal Responsibility and Budget Management (FRBM) Act, 2013? Discuss critically its salient features and their effectiveness. (UPSC IAS/2013)
A recent report published by IIM-A suggested that India must prioritize investment in Nuclear energy sector and expand related infrastructure.
Why India must prioritize investment in the Nuclear energy sector?
India aims to be a developed country by 2047 and is on track to achieve net zero — or effectively zero-carbon dioxide emissions by 2070.
Key findings of the Report:
Current Energy Mix: Solar energy constitutes 16% of India’s installed generation capacity, while coal comprises 49%. Nuclear energy currently comprises only 1.6% of India’s energy mix
Significant increase in nuclear power: The best-case scenario shows emissions falling to 0.55 billion tonnes of carbon dioxide by 2070, achieving ‘net zero’. This scenario entails a significant increase in nuclear power capacity, reaching 30 GW by 2030 and 265 GW by 2050.
Investment Requirements for Nuclear Energy: Achieving the proposed figures for nuclear energy would necessitate a doubling of investments. India would require an estimated ₹150-200 lakh crore between 2020-2070 to finance the necessary transitions in the energy sector
Need technology-based solution: The authors emphasize that achieving net zero emissions requires a combination of technologies rather than a single solution.
Transitioning away from coal: Coal is expected to remain a significant component of India’s energy system, serving as the “backbone”. However, transitioning away from coal would require substantial investment
What are the Challenges for India’s Goal of Net-Zero Emissions?
Uranium Factor: Data by the Central Electricity Authority say solar energy accounts for 16% of India’s installed generation capacity. To achieve these idealistic figures for nuclear energy would require a doubling of investments as well as the assumption that uranium, a critical fuel but restricted by international embargo, is available in necessary quantities.
Coal Factor: Coal accounts for 49% of India’s capacity. Coal would likely be the “backbone” of the Indian energy system and if the country has to phase down coal in the next three decades, it would need to build adequate infrastructure for alternative sources such as nuclear power, in addition to flexible grid infrastructure and storage to support the integration of renewable energy.
Suggested measures by the Report are:
Research and Development: Invest in research and development to improve efficiency and reduce costs of renewable energy technologies, as well as advancements in nuclear energy technology.
Policy Support: Implement supportive policies and regulations to encourage private sector investment in the energy sector, including streamlined approval processes, tax incentives, and renewable energy mandates.
International Cooperation: Engage in diplomatic efforts to secure access to nuclear fuel and address international embargoes, while also collaborating with other countries on research and development in the energy sector.
Conclusion: India’s path to development by 2047 hinges on prioritizing energy sector investment, as per an IIM-A report. Achieving net zero emissions by 2070, India would need close to ₹150-200 lakh crore between 2020-2070 to finance these transitions.
Mains PYQ
Q With growing energy needs should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy. (UPSC IAS/2018)
To address the rising threat of cyber fraud, the Reserve Bank of India (RBI) is planning to establish a Digital India Trust Agency (DIGITA).
About Digital India Trust Agency (DIGITA)
DIGITA aims to tackle the proliferation of illegal lending apps by verifying and maintaining a register of authenticated digital lending platforms.
Role of DIGITA:
Public Register: It will maintain a public register of verified apps, providing transparency and aiding law enforcement agencies in identifying unauthorised platforms.
Verification Hub: It will serve as a central agency for vetting digital lending apps, ensuring their authenticity and compliance with regulations.
Regulatory Implications
Apps lacking the ‘verified’ signature from DIGITA will be deemed unauthorized, enhancing law enforcement efforts against financial crimes in the digital domain.
Verification processes will promote transparency and accountability within the digital lending sector, curbing fraudulent activities.
Progress made so far
The RBI has shared a list of 442 digital lending apps with the IT Ministry for whitelisting with Google.
Google has removed over 2,200 digital lending apps from its PlayStore, aligning with RBI and DFS directives to only allow apps from regulated entities or their partners.
PYQ:
2016:
Regarding ‘DigiLocker’, sometimes seen in the news, which of the following statements is/are correct?
1. It is a digital locker system offered by the Government under Digital India Programme.
2. It allows you to access your e-documents irrespective of your physical location.
Select the correct answer using the code given below.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Practice MCQ:
Consider the following statements about RBI led Digital India Trust Agency (DIGITA):
1. It aims to tackle the proliferation of illegal lending apps.
2. Apps lacking the ‘verified’ signature from DIGITA will be deemed unauthorized.
Recently, the ‘Job for Resilience Report’ was published by the World Bank. The Report talks about how the South Asia region including India is not making use of its demographic dividend.
The pace of job creation in the region fell well short of the growth in the working-age population, even as it projected a strong 6.0-6.1% growth for 2024-25 for the region in its South Asia region.’
Main findings in this report:
The South Asia’s labor markets as Emerging markets and developing economies:
Declining employment ratio: South Asia’s employment weakened from 2000–23, despite a 6% post-pandemic surge. While most EMDEs remained stable, South Asia declined by 2%, with varied changes within.
Low employment ratios: Except for Nepal, South Asian countries have employment ratios significantly lower than other EMDEs, with South Asia’s ratio at 59%, notably lower than the 70% average elsewhere in 2023.
Employment weakness for men and women: In South Asia, men’s employment ratios declined over two decades, compared with other EMDEs. Women’s ratios, persistently low and half those elsewhere, primarily contribute to South Asia’s lower overall employment rates.
A missing engine of growth: In the 2010s, South Asia experienced a surge in labor productivity growth, which later declined below the EMDE average from 2020–23. Unlike other EMDEs, South Asia’s output growth relied heavily on labor productivity growth and working-age population expansion. However, declining employment ratios hampered output growth.
Report on Indian Scenario:
Trends in employment and labor productivity: India’s employment growth in the 2010s was weak but rebounded post-pandemic. The employment ratio declined significantly until 2022 but partially recovered by 3 percentage points in 2023.
Migrant workers: In India, Migrant workers returned to rural areas, and emigration from rural areas slowed, during the pandemic.5 India has the region’s second-largest share of workers in agriculture (44 per cent) after Nepal.
Employment composition: India’s industrial employment grows with public investments, eased labor regulations, and contract labor. The services sector, led by IT, BPO, and healthcare, thrives on a skilled workforce and digital infrastructure, limiting opportunities for unskilled labor.
Measures to address the challenges highlighted in the Report:
Skill Development Programs: Implementing extensive skill development programs to equip the workforce with the necessary skills demanded by the evolving job market, focusing on both technical and soft skills.
Labour Market Reforms: Continuously reviewing and refining labor regulations to strike a balance between protecting workers’ rights and fostering a conducive environment for job creation and investment.
Promotion of Inclusive Growth: Implementing policies aimed at promoting inclusive growth, particularly focusing on increasing women’s participation in the workforce through measures like affordable childcare, flexible work arrangements, and addressing cultural barriers.
Investment in Infrastructure: Continued investment in infrastructure development to facilitate the growth of industries and services, creating more employment opportunities, particularly in rural areas.
Enhancing Productivity: Implementing measures to enhance productivity across sectors through technological advancements, innovation, and efficient resource allocation.
Conclusion: World Bank warns South Asia, including India, risks wasting demographic dividend due to declining employment ratios and low productivity growth. Urgent measures needed: skill development, labor reforms, inclusive growth promotion, infrastructure investment, and productivity enhancement.
PM Modi asked the RBI to prepare a 10-year strategy to make the Indian rupee a globally “accessible and acceptable” currency and to meet the credit needs of every segment of the country
What is Global Currency?
A global currency refers to a single currency that is used by every country in the world. This concept involves all nations adopting the same currency for international trade and transactions
What are the major challenges for India to make Rupeea a Global Currency?
Economic Stability: The Indian economy would need to demonstrate consistent stability and growth to inspire confidence among international investors and users of the currency.
Liquidity in Financial Market Development: These markets need to be deep and liquid to accommodate large volumes of international transactions denominated in INR.
Capital Controls: India currently has restrictions on capital flows in and out of the country. These would need to be eased to facilitate international trade and investment denominated in INR.
Legal and Regulatory Framework: There would need to be robust legal and regulatory frameworks in place to govern the use of the INR in international transactions, including clearing and settlement systems, as well as dispute resolution mechanisms.
International/ Investors Acceptance: Convincing other countries, businesses, and individuals to adopt the INR as a global currency would require concerted diplomatic efforts, as well as initiatives to promote its use in international trade and finance.
Currency Convertibility: Full convertibility of the INR would be necessary for it to become a global currency.
Indian Efforts to Make Rupee a Global Currency:
RBI’s Roadmap for Rupee Internationalization: The RBI has published a report outlining a roadmap for the internationalization of the Rupee. This roadmap recommends actions such as including the Rupee in the Special Drawing Rights (SDR) basket, promoting its use in trade invoicing and settlement, facilitating its use in offshore markets, and developing financial products denominated in Rupees.
Promoting Use of Local Currencies for Cross-Border Transactions: India has been engaging in agreements with countries like the UAE to promote the use of local currencies, including the Rupee, for cross-border transactions.
Way Forward:
Need for Transactions in Rupee: To be an accepted International Currency, the Indian rupee is to be freely used in transactions by residents and non-residents and as a reserve currency for global trade.
Need to increase the Exports: Indian Trades need to be promoted beyond the Asian region. All export and import transactions need to be invoiced in Indian rupees.
Reducing the Constraints: Legal and Regulatory frameworks need to be freed to attract investors for their business profits without hampering security concerns.
Recently, the RBI celebrated its 90th year in Mumbai, marking a significant milestone.
Dr. Ambedkar’s Role in the Establishment of RBI:
Dr. B.R. Ambedkar’s contributions were particularly notable during the Hilton Young Commission discussions in 1926, where he presented his recommendations based on his book “The Problem of the Rupee – Its Origin and Its Solution.”
These discussions laid the foundation for the establishment of the RBI on April 1, 1935.
AboutReserve Bank of India (RBI)
The RBI is the central bank and monetary authority of India.
It was established on April 1, 1935, under the Reserve Bank of India Act, 1934.
Its idea was incepted from the recommendations of the Hilton Young Commission.
Sir Osborne Arkell Smith, an Australian, served as the inaugural Governor.
He was succeeded by Sir C D Deshmukh, the first Indian to hold the position.
It is a centralized institution for India to effectively regulate its monetary and credit policies.
RBI had its initial headquarters in Kolkata, later moving permanently to Mumbai in 1937.
Initially, the RBI operated as a privately owned entity until its full nationalization in 1949.
Functions and Initiatives:
Monetary Authority: The RBI controls the supply of money in the economy to stabilize exchange rates, maintain a healthy balance of payment, and control inflation.
Issuer of Currency: Sole authority to issue currency and combat circulation of counterfeit notes.
Banker to the Government: Acts as a banker to both the Central and State governments, providing short-term credit and financial advisory services.
Lender of Last Resort: Provides emergency liquidity assistance to banks during crises.
Custodian of Foreign Exchange Reserves: Manages foreign exchange reserves and administers the Foreign Exchange Management Act, 1999 (FEMA).
Regulator and Supervisor of Payment and Settlement Systems: Oversees payment and settlement systems in the country, ensuring efficiency and security.
Credit Control and Developmental Role: Promotes credit availability to productive sectors and fosters financial infrastructure development.
Transformative Reforms initiated by the RBI
Green Revolution (1960s-1970s): Supported agricultural growth through credit facilities and rural credit accessibility enhancements.
Banks Nationalization (1969): Aimed at aligning banking sector objectives with national policy goals.
Priority Sector Lending (1972): Ensures timely credit flow to key sectors of the economy.
Economic Liberalization (1991): Opened up the economy to global markets, fostering market-oriented growth.
Unified Payment Interface (UPI), 2016: Enabled seamless and instant transactions across India.
Inflation Targeting Framework, 2016: Set inflation targets to guide monetary policy decisions.
Bharat Bill Payment System (BBPS), 2019: Launched an integrated bill payment system for customer convenience.
Aadhar-based eKYC (2019): Streamlined customer authentication processes for financial institutions.
Emergency Credit Line Guarantee Scheme (ECLGS), 2020: Provided credit assistance to SMEs affected by the COVID-19 pandemic.
Central Bank Digital Currency (2022): RBI is actively exploring the issuance of a CBDC known as e₹ (digital Rupee).
Cryptocurrency Regulation (2022): RBI has maintained a consistent stance against cryptocurrencies, advocating for an outright ban on them (after China and El Salvador imposed the complete ban). In 2020, the Supreme Court of India removed the ban on cryptocurrencies imposed by RBI.
Payment Vision 2025 Document (2023): The goals and vision of the RBI, are categorised in the Payments Vision 2025 documents into five anchor goalposts – Integrity, Inclusion, Innovation, Institutionalisation and Internationalisation.
PYQ:
2012:
The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply which of the following?
1. Banks retain their deposits with the RBI.
2. The RBI lends funds to the commercial banks in times of need.
3. The RBI advises the commercial banks on monetary matters.
Select the correct answer using the codes given below:
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
2013: Consider the following statements:
1. The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government.
2. Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in public interest.
3. The Governor of the RBI draws his power from the RBI Act.
Paradip Port in Odisha has made history by becoming India’s largest major port in terms of cargo volumes, surpassing Deendayal Port Authority in Gujarat during FY24.
About Paradip Port
Paradip Port is situated at the confluence of the Mahanadi River and the Bay of Bengal in the Jagatsinghpur district of Odisha.
It has a natural deep-water harbor, allowing it to accommodate large vessels and handle bulk cargo efficiently.
The port was commissioned in 1966 to serve as a gateway for the maritime trade of eastern India.
Paradip Port Trust, a statutory body under the Major Port Trusts Act, 1963, manages and operates the port.
Key Features of the Port
Infrastructure: It is equipped with modern facilities for handling a variety of cargo, including dry bulk, liquid bulk, containerized cargo, and general cargo.
Deep-Draft Port: The port has extensive berthing facilities and cargo-handling equipment capable of handling millions of tonnes of cargo annually.
Strategic Importance: Paradip Port serves as a vital link for the export and import trade of eastern and central India, contributing significantly to the region’s economic development.
Connectivity: The port is well-connected to major cities and industrial centers in Odisha and neighbouring states through road and rail networks.
Key Feats Achieved
Cargo Throughput: Paradip Port achieved a record-breaking cargo throughput of 145.38 million metric tonnes (MMT) in FY2023-24, surpassing Deendayal Port.
Coastal Shipping Traffic: The port recorded the highest-ever coastal shipping traffic of 59.19 million metric tonnes, showcasing a growth of 1.30% over the previous year.
Thermal Coal Handling: Thermal coal shipping reached 43.97 million metric tonnes, marking a growth of 4.02% over the previous year.
Revenue Growth: Operating revenue crossed Rs 2,300 crore in FY24, reflecting a notable increase of 14.30% compared to the previous fiscal.
Driving Factors of this Success
Enhanced Operational Efficiency: Mechanised coal handling plant operations were optimized, resulting in the highest handling of thermal coal at 27.12 million tonnes.
Productivity Improvement: Paradip Port improved berth productivity to 33,014 MT, the highest among all ports, showcasing a growth of 6.33% over the previous financial year.
Rake Handling and Ship Movements: The port handled 21,665 rakes and 2,710 ships during FY24, registering significant year-on-year growth in both metrics.
Future Prospects
Capacity Expansion: With a current capacity of 289 million tonnes, Paradip Port is poised to exceed 300 million tonnes capacity in the next 3 years with the commissioning of the Western Dock project.
Strategic Location: Located near a mineral-rich hinterland, Paradip Port remains a strategic asset for India’s maritime trade and economic growth.
PYQ:
2017:
What is the importance of developing Chabahar Port by India?
(a) India’s trade with African countries will enormously increase.
(b) India’s relations with oil-producing Arab countries will be strengthened.
(c) India will not depend on Pakistan for access to Afghanistan and Central Asia.
(d) Pakistan will facilitate and protect the installation of a gas pipeline between Iraq and India.
Practice MCQ:
It is situated at the confluence of the Mahanadi River and the Bay of Bengal. It has a natural deep-water harbor, allowing it to accommodate large vessels and handle bulk cargo efficiently.
Which sea port in Odisha is being talked about by the above description?
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