Regional Rural Banks


Recently, a meeting was held between the finance minister and the heads of banks to discuss various reforms in Regional Rural Banks (RRBs).


GS II: Indian Economy

Dimensions of the Article:

  1. What are Regional Rural Banks (RRBs)?
  2. Functions of RRBs
  3. Issues Related to RRBs

What are Regional Rural Banks (RRBs)?

Set up on the recommendations of Narasimhan Committee on Financial Inclusion in 1976.

  • Can only operate in the areas specified by GOI.
  • Objective of providing credit to the agricultural and rural regions.
  • Financial strength and expertise of commercial banks and Grassroot problem awareness of cooperative societies.
  • CRR and SLR limits apply
  • CAR — 9%
  • Not allowed to borrow under the MSF window.


  • Union: 50%
  • State: 15%
  • Sponsor bank: 35%.

Functions of RRBs:

  • To provide safety to the savings of customers
  • To create credit and increase the supply of money
  • To encourage public confidence in the financial system
  • To mobilize the savings of public
  • To increase its network so as to reach every segment of the society
  • To provide financial services to all customers irrespective of their level of income
  • To bring in social equity by providing financial services to every stratum of society.

Issues Related to RRBs

  • Regional Rural Banks (RRBs) are operating at a higher cost than scheduled commercial banks, and many of their branches are losing money as a result of a lack of business.
  • They primarily provide government programmes like Direct Benefit Transfer in rural areas. Currently, only 19 RRBs have access to online banking, and only 37 have mobile banking licences.
  • Only RRBs that maintain a minimum statutory capital to risk-weighted assets ratio (CRAR) of more than 10% are permitted under current legislation to offer internet banking.

Financial Inclusion Index


The Reserve Bank of India has released the Composite Financial Inclusion Index (FI-Index) for the year ended 31st March 2022.

  • India’s Financial Inclusion Index has improved to 56.4 from 53.9 in the previous year 2021.


GS III: Indian Economy

Dimensions of the Article:

  1. What does Financial Inclusion mean?
  2. About Financial Inclusion Index (FI Index)

What does Financial Inclusion mean?

  • Financial inclusion means the availability and equality of opportunities to access financial services. It refers to a process through which individuals and businesses can access appropriate, affordable and timely financial products and services.
  • The financial products and services include equity, banking, loan and insurance products.
  • The efforts to broaden financial inclusion target those who are unbanked or underbanked and directs sustainable financial services to them.
  • Simply put, financial inclusion extends beyond opening a bank account, as it is possible for individuals with bank accounts to be excluded from financial services.
  • A more inclusive financial system is linked to stronger and more sustainable growth and development and that is why it has become a key priority for countries across the world.

About Financial Inclusion Index (FI Index)

  • Financial Inclusion Index has been conceptualised as a comprehensive index comprising the details of banking, insurance, investments, postal and pension sector in consultation with government and sectoral regulators.
  • FI-Index has been created without any base year.
  • It reflects cumulative efforts of all stakeholders towards financial inclusion.
  • It captures information on different aspects of financial inclusion in a single value in the range of 0 and 100.
    • 0 indicates complete financial exclusion while 100 indicates complete financial inclusion.
  • The FI-Index comprises three broad parameters (weights indicated in brackets) viz., Access (35%), Usage (45%), and Quality (20%) with each of these consisting of various dimensions, which are computed based on a number of indicators.
  • It comprises of three broad parameters such as Access, Usage, and Quality. Each of these parameters comprises of various dimensions, that are computed on the basis of different indicators.
  • It is responsive to ease of access, availability & usage of services along with quality of services, comprising of all 97 indicators.
  • Unique feature is its quality parameter that captures the quality aspect of financial inclusion on the line of financial literacy, consumer protection etc.

SC Calls For A Panel To Look Into Freebies Issue


Recently, The Supreme Court said Parliament may not be able to effectively debate the issue of doing away with “irrational freebies” offered to voters during elections, saying the “reality” is that not a single political party wants to take away freebies.

  • The court suggested setting up a specialised body composed of persons who can “dispassionately” examine the problem


GS-II: Governance (Government Policies and Interventions, Issues arising out of the design and implementation of policies, Transparency and Accountability)

Dimensions of the Article:

  1. What are Freebies?
  2. Understanding difference between welfare schemes and freebies
  3. Impact of freebie culture
  4. Drawbacks of Freebies
  5. Judiciary on the culture of freebies
  6. Way Forward

What are Freebies?

  • Political parties promise to offer free electricity/water supply, monthly allowance to unemployed, daily wage workers, and women as well as gadgets like laptops, smartphones, etc. in order to secure the vote of the people.
  • The states have become habituated to giving freebies, be it in the form of loan waivers or free electricity, cycles, laptops, TV sets, and so on.

Understanding difference between welfare schemes and freebies

  • Welfare initiatives include a targeted Public Distribution System, providing social security for labourers, quality education, fair employment, affordable healthcare, decent housing, and protection from exploitation and violence.
  • Freebies, on the other hand, are provided to attract voters to cast their vote in a particular election. They create limited private benefit for the receiver and do not contribute towards strengthening public goods/facilities.
  • Freebies could include offers such as free rations, TV sets, laptops to students, free rides for women in buses, free gas cylinders and stoves and so on.

Impact of freebie culture

  • Given the electoral effectiveness of the freebies culture, states seem to accord lesser importance to welfare initiatives and hence welfare measures have taken a back seat in terms of governance. There seems to be a withdrawal of the state in providing welfare measures such as social security, access to quality education and health, etc.
  • The impact has been all the more severe on the poor and marginalised communities due to denial of access to their rightful share of state resources. Freebies drastically widen the gap between the rich and the poor.
  • Freebies violate the constitutional mandate of extending benefits for public purposes and instead create private benefits.

Drawbacks of Freebies

  • Freebies undermine the fundamental tenets of macroeconomic stability, the politics of freebies confuses priorities for spending, and subsidies continue to dominate expenditures.
  • Freebies ultimately have an influence on the public coffers, since the majority of Indian states frequently have very little financial resources and revenue sources.
  • Voters are unfairly influenced, the playing field is disrupted, and the integrity of the voting process is tainted by the promise of irrational giveaways from public funds before elections.
  • When giveaways involve providing free electricity, it will result in an excessive use of natural resources and divert attention away from renewable energy sources.

Judiciary on the culture of freebies

  • The Supreme Court gave a ruling in favour of offering of freebies stating that freebies are not corrupt practice as it is mentioned in election manifesto.
  • In S. Subramaniam Balaji v. Govt. of Tamil Nadu (2013), the  court said that “Although, promises in the election manifesto cannot be construed as ‘corrupt practice’ under Section 123 of Representation of People Act, the distribution of freebies influences the people shaking the root of free and fair elections.”
  • In 2021, The Madras High Court expressed its strong displeasure over the way in which political parties were competing with each other to garner votes by offering freebies.

Way Forward

  • There is an urgent need to tackle the freebie culture in India, given its negative impacts. Also, there needs to be a reorientation of public policy in a healthy direction.
  • The political party manifestos should offer programmatic policy interventions towards better public services than narrow private benefits in the form of freebies. They should focus on enhancing budgetary allocation for the maintenance of public infrastructures like schools, colleges, hostels and hospitals.
  • The Election Commission and the Higher Judiciary intervention can help in this regard. An informed and aware citizenry is a must to bring about this change.

National Anti-Doping Bill


Recently, parliament passed the National Anti-Doping Bill 2021 Bill that seeks to create a statutory framework for the National Anti-Doping Agency (NADA).


GS II: Polity and Governance

Dimensions of the Article:

  1. About National Anti-Doping Bill
  2. Significance of the Bill
  3. What are the Issues with the Bill?

About National Anti-Doping Bill

  • It was initially presented in the Lok Sabha in December 2021 and is being piloted by the Union Ministry of Youth Affairs and Sports.
  • The bill will protect the interest of sportspersons as it will provide ample space for them to put forth their versions especially when they face anti- doping charges.
Key Features of the Bill
  • Building institutional capabilities in anti-doping and enabling hosting of major sports events;
  • The Bill provides for constituting this National Anti-Doping Agency as a statutory body.
    • It will be headed by a Director General appointed by the central government. Functions of the Agency include,
    • Planning, implementing, and monitoring anti-doping activities,
    • Investigating anti-doping rule violations,
    • Promoting anti-doping research.
  • The Bill establishes a National Board for Anti-Doping in Sports to make recommendations to the government on anti-doping regulation and compliance with international commitments on anti-doping.
    • The Board will oversee the activities of the Agency and issue directions to it.
  • Protecting rights of all sportspersons;
  • Ensuring time-bound justice to athletes;
  • Enhancing cooperation among agencies in fighting doping in sports;
  • Reinforcing India’s commitment to international obligations for clean sports;
  • Independent mechanism for anti-doping adjudication;
  • Establishing more Dope Testing Labs;
  • Creating job opportunities both, directly & indirectly; and
  • Creating opportunities for academic research, science and manufacturing relating to Anti-Doping.
  • Establishing standards for the manufacturing of nutritional supplements for sports in India.

Significance of the Bill

  • In addition to improving agency collaboration in the battle against doping, the bill aims to provide athletes with time-bound justice.
  • It also aims to reaffirm India’s commitment to upholding its duties under international clean sports laws.
  • The bill would contribute to the development of a reliable, impartial system for anti-doping adjudication.
  • The legislation will also provide NADA and the National Dope Testing Laboratory legal sanctity in how they do their business.

What are the Issues with the Bill?

  • The qualifications of the Director General are not specified in the Bill and are left to be notified through Rules.
  • The central government may remove the Director General from the office on grounds of misbehavior or incapacity or “such other ground”.
  • Leaving these provisions to the discretion of the central government may affect the independence of the Director General.
  • This also goes against the mandate of the World Anti-Doping Agency that such bodies must be independent in their operations.
  • Under the Bill, the Board has powers to remove the members of the Disciplinary Panel and Appeal Panel on grounds which will be specified by regulations and are not specified in the Bill.
  • Further, there is no requirement to give them an opportunity of being heard. This may affect the independent functioning of these panels.

India’s Trade Deficit


India’s trade deficit has widened to a record $31.02 billion in July thanks to contracting merchandise exports and a rise in imports. This is a three-times increase from the $10.63 billion trade deficit reported in July last year.


GS III: Indian Economy

Dimensions of the Article:

  1. What is trade deficit?
  2. Is it bad for a country’s economy?

What is trade deficit?

  • Trade deficit or negative balance of trade (BOT) is the gap between exports and imports.
    • When money spent on imports exceeds that spent on exports in a country, trade deficit occurs.
  • It can be calculated for different goods and services and also for international transactions.
  • The opposite of trade deficit is trade surplus.
What causes it?
  • There are multiple factors that can be responsible.
  • One of them is some goods not being produced domestically.
    • In that case, they have to be imported. This leads to an imbalance in their trade.
  • A weak currency can also be a cause as it makes trade expensive.

Is it bad for a country’s economy?

  • If trade deficit increases, a country’s GDP decreases.
  • A higher trade deficit can decrease the local currency’s value.
  • More imports than exports, according to  economists, impact the jobs market and lead to an increase in unemployment.
  • If more mobiles are imported and less produced locally, then there will be less local jobs in that sector.

Haryana’s Cheerag Scheme for EWS Students


Senior politicians and teachers’ bodies in Haryana have raised questions on the government’s Cheerag scheme, which was recently launched to offer “free education” to Economically Weaker Section (EWS) students of government schools in “budget” private schools.


GS II: Government Schemes

Dimensions of the Article:

  1. What is Haryana’s Cheerag scheme?
  2. What are the concerns over Haryana’s Cheerag scheme?

What is Haryana’s Cheerag scheme?

  • Haryana government recently launched the “Chief Minister Equal Education Relief, Assistance and Grant (Cheerag)” scheme.
  • It was introduced in place of a similar scheme launched by Bhupinder Singh Hooda’s government in 2007 under Rule 134 A of the Haryana School Education Rules, 2003.
  • Under the Cheerag scheme, government school students whose parents have an annual verified income of less than Rs 1.8 lakh can enroll in private schools from Class II to XII.
  • The government will reimburse Rs 700 per student from Classes II to V, Rs 900 per student from Classes VI to VIII, and Rs 1,100 per student from Classes IX to XII.

What are the concerns over Haryana’s Cheerag scheme?

  • Haryana Vidyalaya Adhyapak Sangh, a body of government school teachers, is not impressed with the Cheerag scheme and has already staged protests against it across the state.
  • The union leaders have apprehensions that the scheme may be aimed at encouraging private schools at the cost of government schools.


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