National Current Affairs – UPSC/KAS Exams- 2nd October 2018
RBI to Infuse Rs 36000cr to ease Liquidity
Topic: GS-3 Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
IN NEWS: The Reserve Bank of India (RBI) has decided to infuse ₹36,000 through open market purchase of bonds in October as liquidity has tightened due to an uptick in loan demand in the festive season.
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- Based on an assessment of the durable liquidity needs going forward and the seasonal growth in currency in circulation observed in build-up to the festive season, RBI has decided to conduct purchase of Government securities under Open Market Operations (OMOs) for an aggregate amount of ₹360 billion in the month of October 2018.
- RBI had reassured the financial markets that it stands ready to meet the liquidity requirements of the system.
- The OMO amount stated above is indicative and RBI retains the flexibility to change it, depending on the evolving liquidity and market conditions.
- Market participants said more liquidity infusion is required to address the cash deficit.
RBI Monetary Policy:
- Monetary policy refers to the policy of the central bank with regard to the use of monetary instruments under its control to achieve the goals specified in the Act.
- The Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy. This responsibility is explicitly mandated under the Reserve Bank of India Act, 1934.
Monetary Policy Process
- The Monetary Policy Committee (MPC) constituted by the Central Government under Section 45ZB determines the policy interest rate required to achieve the inflation target.
- The Reserve Bank’s Monetary Policy Department (MPD) assists the MPC in formulating the monetary policy. Views of key stakeholders in the economy, and analytical work of the Reserve Bank contribute to the process for arriving at the decision on the policy repo rate.
- The Financial Market Committee (FMC) meets daily to review the liquidity conditions so as to ensure that the operating target of monetary policy (weighted average lending rate) is kept close to the policy repo rate.
Goals Of Monetary Policy
- The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth. Price stability is a necessary precondition to sustainable growth.
- In May 2016, the Reserve Bank of India (RBI) Act, 1934 was amended to provide a statutory basis for the implementation of the flexible inflation targeting framework.
- The amended RBI Act also provides for the inflation target to be set by the Government of India, in consultation with the Reserve Bank, once in every five years. Accordingly, the Central Government has notified in the Official Gazette 4 per cent Consumer Price Index (CPI) inflation as the target for the period from August 5, 2016 to March 31, 2021 with the upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent.
- The Central Government notified the following as factors that constitute failure to achieve the inflation target:(a) the average inflation is more than the upper tolerance level of the inflation target for any three consecutive quarters; or (b) the average inflation is less than the lower tolerance level for any three consecutive quarters.
- Prior to the amendment in the RBI Act in May 2016, the flexible inflation targeting framework was governed by an Agreement on Monetary Policy Framework between the Government and the Reserve Bank of India of February 20, 2015.
There are several direct and indirect instruments that are used for implementing monetary policy
- Repo Rate: The (fixed) interest rate at which the Reserve Bank provides overnight liquidity to banks against the collateral of government and other approved securities under the liquidity adjustment facility (LAF).
- Reverse Repo Rate: The (fixed) interest rate at which the Reserve Bank absorbs liquidity, on an overnight basis, from banks against the collateral of eligible government securities under the LAF.
- Liquidity Adjustment Facility (LAF): The LAF consists of overnight as well as term repo auctions. The Reserve Bank also conducts variable interest rate reverse repo auctions, as necessitated under the market conditions.
- Marginal Standing Facility (MSF): A facility under which scheduled commercial banks can borrow additional amount of overnight money from the Reserve Bank by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a limit at a penal rate of interest. This provides a safety valve against unanticipated liquidity shocks to the banking system.
- Bank Rate: It is the rate at which the Reserve Bank is ready to buy or rediscount bills of exchange or other commercial papers. This rate has been aligned to the MSF rate and, therefore, changes automatically as and when the MSF rate changes alongside policy repo rate changes.
- Cash Reserve Ratio (CRR): The average daily balance that a bank is required to maintain with the Reserve Bank as a share of such per cent of its Net demand and time liabilities (NDTL) that the Reserve Bank may notify from time to time in the Gazette of India.
- Statutory Liquidity Ratio (SLR): The share of NDTL that a bank is required to maintain in safe and liquid assets, such as, unencumbered government securities, cash and gold. Changes in SLR often influence the availability of resources in the banking system for lending to the private sector.
- Open Market Operations (OMOs): These include both, outright purchase and sale of government securities, for injection and absorption of durable liquidity, respectively.
- Market Stabilisation Scheme (MSS): This instrument for monetary management was introduced in 2004. Surplus liquidity of a more enduring nature arising from large capital inflows is absorbed through sale of short-dated government securities and treasury bills. The cash so mobilised is held in a separate government account with the Reserve Bank.
Model UPSC Question: RBI has chosen CPI (Consumer Price Index) as the sole indicator for formulating monetary policy. Critically examine the relevance of CPI as the sole indicator for formulating monetary policy.
Center Initiate probe in to type -2 polio virus Contamination
Topic: Health related Issues
IN NEWS: The Union Health Ministry has ordered an inquiry into the type-2 polio virus contamination detected in the vials used for immunisation in Uttar Pradesh, Maharashtra and Telangana, and has ordered additional immunisation in three States.
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- The government, which has stepped-up surveillance after the breach, has said, “That all possible precautions have been put in place to ensure that polio doesn’t resurface.’’
- The last case due to type-2 wild poliovirus globally was reported from Aligarh in India in 1999.
- India eliminated the type-2 strain in 2016, and the type-2 containing poliovirus vaccine (ToPV) was phased out in April 2016. Children born after April 2016 in India have no immunity to type-2 polio virus.
- The contamination came to light after surveillance reports from Uttar Pradesh showed signs of the virus in stool samples of some children.
- Immediately, the OPVs were sent for testing which confirmed that some of them were contaminated with type-2 virus.
- Polio (also known as poliomyelitis) is a highly contagious disease caused by a virus that attacks the nervous system. Children younger than 5 years old are more likely to contract the virus than any other group.
- There are three serotypes of poliovirus, each of which causes poliomyelitis. The vaccine used by the World Health Organisation (WHO) in the global eradication effort is a trivalent preparation comprising all three serotypes.
- According to the World Health Organization (WHO), 1 in 200 polio infections will result in permanent paralysis. However, thanks to the global polio eradication initiative in 1988 polio has been eliminated inAmericas,Europe,Western Pacific,Southeast Asia.
- As a highly contagious virus, polio transmits through contact with infected feces. Objects like toys that have come near infected feces can also transmit the virus. Sometimes it can transmit through a sneeze or a cough, as the virus lives in the throat and intestines. This is less common.
- People living in areas with limited access to running water or flush toilets often contract polio from drinking water contaminated by infected human waste.
- The best way to prevent polio is to get the vaccination. Children should get polio shots according to the vaccination schedule presented by the Centers for Disease Control and Prevention (CDC).
Model mains question: Analyse the role of Universal Immunisation Programme making India a developed nation.
Environment Ministry Sanctions River Pollution Abatement Project In Udhampur
Topic: Environment and Ecology
In news: In an effort to supplement the efforts of State Governments in pollution abatement in identified stretches of various rivers through National River Conservation Plan (NRCP) for implementation of projects on cost-sharing basis between the Centre and State Governments, the Ministry of Environment, Forest and Climate Change has sanctioned a project for ‘Pollution abatement of rivers Devika and Tawi in Udhampur, Jammu & Kashmir. The project is scheduled for completion by March 2021.
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- Upon completion, the project will have a significant and direct beneficial impact in terms of reduction of pollution load in the two rivers and improvement in their water quality.
- As full sewerage system will be laid in the town and its entire sewage will be treated, the project will improve the aesthetics and sanitation conditions in Udhampur and support the Swachh Bharat Abhiyan towards ensuring cleanliness in the town.
- The total sanctioned cost of the project will be shared between the Government of India and Government of J&K on 90:10 cost-sharing basis.
- The Urban Engineering and Environment Department (UEED) is the implementing agency of the project.
- The main reason for the pollution of Devika and Tawi rivers in Udhampur is discharge of untreated sewage from the town. Presently, no sewerage system and Sewage Treatment Plant (STP) exist in Udhampur.
- The project for ‘Pollution abatement of rivers Devika and Tawi rivers in Udhampur will commence under NRCP .
National River Conservation Plan (NRCP)
- National River Conservation Plan (NRCP) is a centrally funded scheme launched in 1995 aimed at preventing the pollution of rivers. It provoide information of each state on amount sanctioned under NRCP to which city and for what purpose. Purposes included under the plan are construction of STP, river front development, low cost sanitation, afforestation etc.
- Based on independent monitoring undertaken by reputed institutions on some of the major rivers under NRCP, the water quality in terms of BOD (Bio-chemical Oxygen Demand) values has improved at most locations as compared to water quality before taking up of pollution abatement schemes.
Incorporation of Limited Liability Partnership through complete online system
In news: Ministry of Corporate Affairs has launched another process re-engineering by making incorporation of Limited Liability Partnership (LLP) through a complete online system.
What is Limited Liability Partnership
- It is a new corporate structure that combines the flexibility of a partnership and the advantages of limited liability of a company at a low compliance cost.
- In other words, it is an alternative corporate business vehicle that provides the benefits of limited liability of a company, but allows its members the flexibility of organising their internal management on the basis of a mutually arrived agreement, as is the case in a partnership firm.
- Owing to flexibility in its structure and operation, it would be useful for small and medium enterprises, in general, and for the enterprises in services sector, in particular.
- Internationally, LLPs are the preferred vehicle of business, particularly for service industry or for activities involving professionals.
Limited Liability Partnership Act 2008
- The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership. The LLP will have perpetual succession.
- The LLP will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature. No partner would be liable on account of the independent or un-authorized actions of other partners or their misconduct.
- Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India. The duties and obligations of Designated Partners shall be as provided in the law.
- The Central Government has powers to investigate the affairs of an LLP, if required, by appointment of competent Inspector for the purpose.
- A firm, private company or an unlisted public company is allowed to be converted into LLP in accordance with the provisions of the Act. The winding up of the LLP may be either voluntary or by the Tribunal to be established under the Companies Act, 1956. Till the Tribunal is established, the power in this regard has been given to the High Court.
- The LLP Act 2008 confers powers on the Central Government to apply provisions of the Companies Act, 1956 as appropriate, by notification with such changes or modifications as deemed necessary. However, such notifications shall be laid in draft before each House of Parliament for a total period of 30 days and shall be subject to any modification as may be approved by both Houses.
- The Indian Partnership Act, 1932 shall not be applicable to Limited Liability Partnerships.
NHRC ‘s International Human Rights Conclave
Topic: Statutory, regulatory and various quasi-judicial bodies
In news: Vice President inaugurates NHRC’s International Human Rights Conclave. The International Conclave is aimed at providing the platform to the national human rights institutions of various countries, global networks of NHRIs, government and non-governmental organisations and other stakeholders to share their views and to deliberate on the road ahead on important human rights concerns.
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- The Vice President appreciated the good work done by NHRC as a diligent watchdog of human rights protection and said that the massive rise in the number of complaints received by the NHRC from 496 in 1993 to 79,612 cases in 2018 were a testament to the faith that the people of India placed on the NHRC.
- He lauded the efforts of NHRC towards eradication of the abhorrent practices of bonded labor child labor and manual scavenging.
- The Vice President argued that human rights did not confer unfettered liberty on anyone to speak against the state or nation and added that human rights are best upheld if they are in harmony with the interests of the nation and fellow citizens.
National Human Rights Commission
- National Human Rights Commission (NHRC) of India is an autonomous public body constituted on 12 October 1993 under the Protection of Human Rights Ordinance of 28 September 1993.
- It was given a statutory basis by the Protection of Human Rights Act, 1993 (TPHRA).
- The NHRC is the National Human Rights Commission of India,[responsible for the protection and promotion of human rights, defined by the Act as “rights relating to life, liberty, equality and dignity of the individual guaranteed by the Constitution or embodied in the International Covenants”.
- proactively or reactively inquire into violations of government of India human rights or negligence in the prevention of such violation by a public servant
- By leave of the court, to intervene in court proceeding relating to human rights,
Make recommendations about granting relief to the victims and their families.
- To study treaties and other international instruments on human rights and make recommendations for their effective implementation
- Undertake and promote research in the field of human rights
- Engage in human rights education among various sections of society.
- Encourage the efforts of NGOs and institutions congress to working in the field of antihuman rights.
- Such other function as it may consider it necessary for the protection of human rights.
The NHRC consists of:
- A Chairperson, should be retired Chief Justice of India.
- (One member who is, or has been, a Judge of the Supreme Court of India
- One member who is, or has been, the Chief Justice of a High Court
- Two members to be appointed from among persons having knowledge of, or practical experience in, matters relating to human rights
- In addition, the Chairpersons of four National Commissions (Scheduled Castes, Scheduled Tribes, Women and Minorities) serve as ex officio members.
- The sitting Judge of the Supreme Court or sitting Chief Justice of any High Court can be appointed only after the consultation with the Chief Justice of Supreme Court.
Model UPSC Question: In a democracy dissent should be welcomed and disintegration should be contemned. In the light of Article 19 Critically analyse the statement.
Exercise Avia Indra
Topic: International Relations
In news: The second edition of Exercise Aviaindra, a Biennial Air Force level exercise between Indian and the Russian Federation, was conducted.
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- The aim of the exercise was to formulate and validate use of airpower in anti-terrorist operation in a bilateral scenario.
- The exercise which was conducted at Lipetsk, Russia began with interaction of the Indian contingent with their Russian counterparts. The aim of the exercise was to learn best practices from one another and it also includes simulator training. The exercise included briefing on Aerospace safety and anti-terrorist air operations.
Topic: Environment and Ecology
In news: The forest officials zeroed in on an alleged crime spot and recovered a truck load of red sanders logs in Karakambadi beat.
More On Red Sanders
- Red sanders are endemic to the southern Eastern Ghats mountain range of South India.This tree is valued for the rich red color of its wood.
- The wood is not aromatic.
- In India sandalwood is one main and lucrative market for smugglers, as a high price is paid for this wood in China. Since the exporting of sandalwood is illegal in India, the underground market is growing and there are a number of arrests every year of those trying to smuggle this wood to China.
- It was listed as an Endangered species by the IUCN, because of over-exploitation for its timber in South India; however, it was later reclassified to Near Threatened in 2018, as the scale of this loss is not properly known.
- It is also listed in the appendix II of the CITES, which means that a certificate is required in order to export it, that should only be granted if the trade is not detrimental to the survival of the species