PM IAS MAY 17 CURRENT EVENTS

The Repo Rate in India

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Context:

Recently, the Reserve Bank of India, in a surprise move, announced that the bank’s Monetary Policy Committee (MPC) had held an ‘off-cycle’ meeting at which it had decided unanimously to raise the “policy repo rate by 40 basis points to 4.40%, with immediate effect”.

Relevance:

GS III- Indian Economy

Dimensions of the Article:

1. What is the repo rate?
2. Why is the repo rate such a crucial monetary tool?
3. How does the repo rate work?
4. What impact can a repo rate change have on inflation?

What is the repo rate?

• The repo rate is one of several direct and indirect instruments that are used by the RBI for implementing monetary policy.
• Specifically, the RBI defines the repo rate as the fixed interest rate at which it provides overnight liquidity to banks against the collateral of government and other approved securities under the liquidity adjustment facility (LAF).
• In other words, when banks have short-term requirements for funds, they can place government securities that they hold with the central bank and borrow money against these securities at the repo rate.
• Since this is the rate of interest that the RBI charges commercial banks such as State Bank of India and ICICI Bank when it lends them money, it serves as a key benchmark for the lenders to in turn price the loans they offer to their borrowers.

Why is the repo rate such a crucial monetary tool?

• According to Investopedia, when government central banks repurchase securities from commercial lenders, they do so at a discounted rate that is known as the repo rate.
• The repo rate system allows central banks to control the money supply within economies by increasing or decreasing the availability of funds.

How does the repo rate work?

• Besides the direct loan pricing relationship, the repo rate also functions as a monetary tool by helping to regulate the availability of liquidity or funds in the banking system.
• For instance,
  • When the repo rate is decreased,
    • Banks may find an incentive to sell securities back to the government in return for cash. This increases the money supply available to the general economy.
  • When the repo rate is increased,
    • Lenders would end up thinking twice before borrowing from the central bank at the repo window thus, reducing the availability of money supply in the economy.
• Since inflation is, in large measure, caused by more money chasing the same quantity of goods and services available in an economy, central banks tend to target regulation of money supply as a means to slow inflation.

What impact can a repo rate change have on inflation?

• Inflation can broadly be: mainly demand driven price gains, or a result of supply side factors that in turn push up the costs of inputs used by producers of goods and providers of services, thus spurring inflation, or most often caused by a combination of both demand and supply side pressures.
• Changes to the repo rate to influence interest rates and the availability of money supply primarily work only on the demand side by making credit more expensive and savings more attractive and therefore dissuading consumption.
• However, they do little to address the supply side factors, be it the high price of commodities such as crude oil or metals or imported food items such as edible oils.

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Places of Worship Act

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Context:

The Supreme Court will hear a challenge to the order of a civil court in Varanasi directing a videographic survey of a temple- mosque complex upholding the Places of Worship (Special Provisions) Act, 1991.

Relevance:

GS I- Communalism, Secularism, Regionalism, GS II- Polity and Governance

Dimensions of the Article:

1. What is the Places of Worship Act?
2. What are its provisions?
3. When was this law passed?
4. Issues with the law
5. What is the recent uproar about?
6. What did the Supreme Court say about the Places of Worship Act in its Ayodhya judgment?

What is the Places of Worship Act?

The long title describes it as “An Act to prohibit conversion of any place of worship and to provide for the maintenance of the religious character of any place of worship as it existed on the 15th day of August, 1947, and for matters connected therewith or incidental thereto.”

What are its provisions?

• Section 3 of the Act bars the conversion, in full or part, of a place of worship of any religious denomination into a place of worship of a different religious denomination — or even a different segment of the same religious denomination.
• Section 4(1) declares that the religious character of a place of worship “shall continue to be the same as it existed” on August 15, 1947.
• Section 4(2) says any suit or legal proceeding with respect to the conversion of the religious character of any place of worship existing on August 15, 1947, pending before any court, shall abate — and no fresh suit or legal proceedings shall be instituted.
  • The proviso to this subsection saves suits, appeals and legal proceedings that are pending on the date of commencement of the Act, if they pertain to the conversion of the religious character of a place of worship after the cut-off date.
• Section 5 stipulates that the Act shall not apply to the Ramjanmabhoomi-Babri Masjid case, and to any suit, appeal or proceeding relating to it.

When was this law passed?

• The Act was brought by the Congress government of Prime Minister P V Narasimha Rao at a time when the Ram temple movement was at its peak.
• The Babri Masjid was still standing, but L K Advani’s rath yatra, his arrest in Bihar, and the firing on kar sevaks in Uttar Pradesh had raised communal tensions.

Issues with the law

• The law has been challenged on the ground that it bars judicial review, which is a basic feature of the Constitution.
• It imposes an “arbitrary irrational retrospective cutoff date”, and abridges the right to religion of Hindus, Jains, Buddhists and Sikhs.

What is the recent uproar about?

• The Varanasi temple-mosque complex clearly demonstrates that the mosque is built on top of a dilapidated temple.
• The appearance of Hindu idols within the mosque is captured on video.
• Right-wing propagandists emphasise Aurangzeb’s goal in leaving the temple’s remnants to remind communities of their historical fate and to remind future rulers of their prior majesty and power.

What did the Supreme Court say about the Places of Worship Act in its Ayodhya judgment?

• The constitutional validity of the 1991 Act was not under challenge, nor had it been examined before the Supreme Court Bench that heard the Ramjanmaboomi-Babri Masjid title suit.
• Even so, the court, while disagreeing with certain conclusions drawn by the Allahabad High Court about the Act, made specific observations in its support.
• The Places of Worship Act imposes a non-derogable obligation towards enforcing our commitment to secularism under the Indian Constitution.
• The law is hence a legislative instrument designed to protect the secular features of the Indian polity, which is one of the basic features of the Constitution.
• The Places of Worship Act is a legislative intervention which preserves non-retrogression as an essential feature of our secular values.

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How Sikkim became a part of India

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Context:

It was on May 16, 1975 that Sikkim became 22nd state of the Union of India.

Relevance:

GS II- Polity and Governance (Federalism)

Dimensions of the Article:

1. Attacks during Namgyal Rule
2. British Expansion
3. Scenario after 1947
4. 1974 Elections
5. Decision to join India

Attacks during Namgyal Rule

• Beginning with Phuntsog Namgyal, the first chogyal (monarch), the Namgyal dynasty ruled Sikkim until 1975. At one point, the kingdom of Sikkim included the Chumbi valley and Darjeeling; the former being part of China now.
• In the early 1700s, the region saw a series of conflicts between Sikkim, Nepal, Bhutan, and Tibet, which resulted in a shrinking of Sikkim’s territorial boundaries.

British Expansion

• When the British arrived, their expansion plans in the Indian subcontinent included controlling the Himalayan states.
• The kingdom of Nepal, meanwhile, continued with its attempts to expand its territory.
  • This resulted in the Anglo-Nepalese war (November, 1814 to March, 1816), also known as the Gorkha war, which was fought between the Gorkhali army and the East India Company.
  • Both sides had ambitious expansion plans for the strategically important mountainous north of the Indian subcontinent.
• In 1814, Sikkim allied with the East India Company in the latter’s campaign against Nepal.
• The Company won and restored to Sikkim some of the territories that Nepal had wrested from it in 1780.

The turning point

• A turning point in the history of Sikkim involves the appointment of John Claude White, a civil servant in British India who in 1889 was appointed the Political Officer of Sikkim, which by then was a British Protectorate under the Treaty of Tumlong signed in March, 1861.
• As with most of the Indian subcontinent that the British had under their administrative control, the kingdom of Sikkim, although a protectorate, had little choice in the administration of its own kingdom.
• The British encouraged Nepali migration into Sikkim and it didn’t really happen with the monarch’s consent.
• The Namgyal monarch could not criticise decisions made by the British, but the ruler did complain about this influx of Nepali migrants into the kingdom.

Scenario after 1947

• Three years after India’s Independence in 1947, Sikkim became a protectorate of India.
• In 1950, a treaty was signed between the then Sikkim monarch Tashi Namgyal and India’s then Political Officer in Sikkim, Harishwar Dayal.
  • A clause in the treaty read: “Sikkim shall continue to be a Protectorate of India and, subject to the provisions of this Treaty, shall enjoy autonomy in regard to its internal affairs.”
• Geopolitical changes during that time put Sikkim in a delicate position.
• China’s invasion of Tibet in 1949 and Nepal’s attacks on Sikkim throughout the kingdom’s history were cited as reasons why the kingdom needed the support and protection of a powerful ally.
• Further, the talk of persecution of Tibetans after China’s arrival at the scene generated fear of the possibility of Sikkim suffering a similar fate.

Dalai Lama’s Arrival

• In March 1959, the 14th Dalai Lama escaped from Tibet.
• After the Dalai Lama reached Indian borders, he and his entourage settled at the Tawang monastery in Arunachal Pradesh.
• A month later, he travelled to Mussoorie, where he met then Prime Minister Jawaharlal Nehru to discuss the future of the Tibetan refugees who had travelled with him.
• The repercussions of India’s decision to welcome and give refuge to the Dalai Lama sent a message to some in Sikkim that unlike China, aligning with India would guarantee their protection and security, said Bhutia.
• This was the perspective of the ruling elite in Sikkim.

Public discontent against monarchy

• The period between the 1950s and the 1970s marked growing discontent in Sikkim.
• Primarily, there was anger against the monarchy because of growing inequality and feudal control.
• In December 1947, political groups came together and formed the Sikkim State Congress, a political party that supported the merging of Sikkim with the Union of India.
• Three years later, the Sikkim National Party was formed that supported the monarchy and independence of the kingdom.
• A democratic system would have meant a reduction in powers held by the monarch in Sikkim and some researchers believe that the last monarch, Palden Thondup Namgyal, attempted to reduce civil and political liberties.
• Anti-monarchy protests grew in 1973, following which the royal palace was surrounded by thousands of protesters.
• Indian troops arrived after the monarch was left with no choice but to ask New Delhi to send assistance.
• Finally, a tripartite agreement was signed in the same year between the chogyal, the Indian government, and three major political parties, so that major political reforms could be introduced.

1974 Elections

• A year later, in 1974, elections were held, where the Sikkim State Congress led by Kazi Lhendup Dorji won, defeating pro-independence parties.
• That year, a new constitution was adopted, which restricted the role of the monarch to a titular post, which Palden Thondup Namgyal bitterly resented.
• In the same year, India upgraded Sikkim’s status from protectorate to “associated state”, allotting to it one seat each in the Lok Sabha and Rajya Sabha.
• Opposed to the move, the monarch attempted to bring international attention to it soon after.

Decision to join India

• A referendum was held in 1975 where an overwhelming majority voted in favour of abolishing the monarchy and joining India.
• A total 59,637 voted in favour of abolishing the monarchy and joining India, with only 1,496 voting against.
• Sikkim’s new parliament, led by Kazi Lhendup Dorjee, proposed a bill for Sikkim to become an Indian state, which was accepted by the Indian government.

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Report flags Risk of Fortified Rice

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Context

A report has flagged issues due to threats posed to anaemic persons over iron over-nutrition created by rice fortification.

Relevance:

GS III- Indian Economy, Public distribution system

Dimensions of the Article:

1. Highlights of the report
2. What are the risks highlighted?
3. What is rice fortification?
4. Need of rice fortification
5. What are the standards for fortification?
6. Advantages
7. Issues with fortified food

Highlights of the report

• Despite the food regulator’s regulations on fortified foods, the activists observed that neither field officials nor recipients had been trained about the potential dangers.
• There were no warning labels.
• The right to make informed eating choices is a fundamental right. In the instance of rice fortification, no prior informed consent from the recipients was ever sought.

What are the risks highlighted?

• Thalassemia, sickle cell anaemia, and malaria are diseases in which the body already has an excess of iron, whereas tuberculosis patients are unable to absorb iron.
• Patients with these conditions who consume iron-fortified meals may experience a reduction in immunity and organ function.

What is rice fortification?

• The Food Safety and Standards Authority of India (FSSAI) defines fortification as “deliberately increasing the content of essential micronutrients in a food so as to improve the nutritional quality of food and to provide public health benefit with minimal risk to health”.
• The cooking of fortified rice does not require any special procedure.
• After cooking, fortified rice retains the same physical properties and micronutrient levels as it had before cooking.
• Fortified rice will be packed in jute bags with the logo (‘+F’) and the line “Fortified with Iron, Folic Acid, and Vitamin B12”.
• Various technologies are available to add micronutrients to regular rice, such as coating, dusting, and ‘extrusion’.
• The last mentioned involves the production of fortified rice kernels (FRKs) from a mixture using an ‘extruder’ machine.
• It is considered to be the best technology for India.
• The fortified rice kernels are blended with regular rice to produce fortified rice.

Need of rice fortification

• India has very high levels of malnutrition among women and children.
• According to the Food Ministry, every second woman in the country is anaemic and every third child is stunted.
• Fortification of food is considered to be one of the most suitable methods to combat malnutrition.
• Rice is one of India’s staple foods, consumed by about two-thirds of the population.
• Per capita rice consumption in India is 6.8 kg per month.
• Therefore, fortifying rice with micronutrients is an option to supplement the diet of the poor.

What are the standards for fortification?

• Under the Ministry’s guidelines, 10 g of FRK must be blended with 1 kg of regular rice.
• According to FSSAI norms, 1 kg of fortified rice will contain the following: iron (28 mg-42.5 mg), folic acid (75-125 microgram), and vitamin B-12 (0.75-1.25 microgram).
• Rice may also be fortified with zinc (10 mg-15 mg), vitamin A (500-750 microgram RE), vitamin B-1 (1 mg-1.5 mg), vitamin B-2 (1.25 mg-1.75 mg), vitamin B-3 (12.5 mg-20 mg) and vitamin B-6 (1.5 mg-2.5 mg) per kg.

Advantages

• Fortified staple foods will contain natural or near-natural levels of micro-nutrients, which may not necessarily be the case with supplements.
•  It provides nutrition without any change in the characteristics of food or the course of our meals.
•  If consumed on a regular and frequent basis, fortified foods will maintain body stores of nutrients more efficiently and more effectively than will intermittently supplement.
•  The overall costs of fortification are extremely low; the price increase is approximately 1 to 2 percent of the total food value.
•  It upholds everyone’s right to have access to safe and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger

Issues with fortified food

• Fortification and enrichment upset nature’s packaging. Our body does not absorb individual nutrients added to processed foods as efficiently compared to nutrients naturally occurring.
• Supplements added to foods are less bioavailable. Bioavailability refers to the proportion of a nutrient your body is able to absorb and use.
• They lack immune-boosting substances.
• Fortified foods and supplements can pose specific risks for people who are taking prescription medications, including decreased absorption of other micro-nutrients, treatment failure, and increased mortality risk.

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Ramgarh Vishdhari notified as India’s 52nd Tiger Reserve

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Context:

Ramgarh Vishdhari Wildlife Sanctuary is now notified as a tiger reserve after a nod by the Union Ministry of Environment, Forest and Climate Change (MoEF&CC).

Relevance:

GS III- Environment and Ecology

Dimensions of the Article:

1. About Ramgarh Vishdhari TR
2. About the National Tiger Conservation Authority (NTCA)
3. Project Tiger
4. Project Tiger Reserves of India

About Ramgarh Vishdhari TR

• Ramgarh Vishdhari Wildlife Sanctuary acts like a buffer for Ranthambore National Park, one of the most famous wildlife sanctuaries in India.
• It is located almost 45 kilometers on Bundi-Nainwa Road and covers an area of 252 square kilometers approx.
• It is rich in biodiversity & is home to various kinds of wild animals like Indian Wolf, Leopard, Striped Hyena, Sloth Bear, Golden Jackal, Chinkara, Nilgai & Fox.
• Its flora consists of Dhok, Khair, Salar, Khirni trees with some Mango and Ber trees.
• It is now India’s 52nd tiger reserve and Rajasthan’s fourth, after Ranthambore, Sariska and Mukundra.
• Though the tiger population in Ramgarh itself was not high, it plays an important role in connecting the Ranthambore and Mukundra Tiger Reserves of Rajasthan.

About the National Tiger Conservation Authority (NTCA)

• The National Tiger Conservation Authority (NTCA) was established in December 2005 following a recommendation of the Tiger Task Force, constituted by the Prime Minister of India for reorganised management of Project Tiger and the many Tiger Reserves in India.
• The Wildlife Protection Act of 1972 was amended in 2006 to provide for constituting the National Tiger Conservation Authority responsible for implementation of the Project Tiger plan to protect endangered tigers.
• The National Tiger Conservation Authority is set up under the Chairmanship of the Minister for Environment and Forests.
• The Authority will have eight experts or professionals having qualifications and experience in wildlife conservation and welfare of people including tribals, apart from three Members of Parliament of whom two will be elected by the House of the People and one by the Council of States.
• The Authority, interalia, would lay down normative standards, guidelines for tiger conservation in the Tiger Reserves, apart from National Parks and Sanctuaries.
• It would provide information on protection measures including future conservation plan, tiger estimation, disease surveillance, mortality survey, patrolling, report on untoward happenings and such other management aspects as it may deem fit, including future plan for conservation.
• The Authority would also facilitate and support tiger reserve management in the States through eco-development and people’s participation as per approved management plans, and support similar initiatives in adjoining areas consistent with the Central and state laws.
• The Tiger Conservation Authority would be required to prepare an Annual Report, which would be laid in the Parliament along with the Audit Report.
• Every 4 years the National Tiger Conservation Authority (NTCA) conducts a tiger census across India.

Project Tiger

• Project Tiger is a tiger conservation programme launched in April 1973 by the Government of India.
• The project aims at ensuring a viable population of Bengal tigers in their natural habitats, protecting them from extinction, and preserving areas of biological importance as a natural heritage forever represented as close as possible the diversity of ecosystems across the distribution of tigers in the country.
• The project’s task force visualized these tiger reserves as breeding nuclei, from which surplus animals would migrate to adjacent forests. Funds and commitment were mastered to support the intensive program of habitat protection and rehabilitation under the project.
• The government has set up a Tiger Protection Force to combat poachers and funded relocation of villagers to minimize human-tiger conflicts.