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UPSC Civil Services Daily Current Affairs 5th May 2022

DAILY CURRENT AFFAIRS ANALYSIS

05 MAY 2022

 

 

 

S. No. Topic Name Prelims/Mains
1.     Monetary Policy Committee Prelims & Mains
2.     Issue of Delay in Local Body Elections Prelims & Mains
3.     State Human Rights Commisssion Prelims & Mains
4.     CRR vs SLR Prelims Specific Topic
5.     Places in News –Ukraine Prelims Specific Topic

 

 

 

 

1 – Monetary Policy Committee:

 GS III

 Indian Economy 
  • Context:
  • RBI has recently increased the repo rates in the recently conducted meeting of the Monetary Policy Committee.
  • MPC’s Background:
  • The Monetary Policy Committee (MPC) of the RBI is entrusted with formulating monetary policy utilising mechanisms such as the repo rate, reverse repo rate, bank rate, and cash reserve ratio (CRR).
  • The Central Government of India established it under Section 45ZB of the RBI Act, which was revised in 1934.
  • Functions:
  • The MPC is in charge of determining the various policy rates, such as the MSF, Repo Rate, Reverse Repo Rate, and Liquidity Adjustment Facility.
  • MPC is made up of the following components:
  • Six people will make up the committee. The government will nominate three of the six members. There will be no government officials on the MPC.
  • The RBI would be represented by the other three members, with the governor serving as the ex-officio chairperson. A member will be the RBI’s deputy governor in charge of monetary policy, as well as an executive director of the central bank.
  • Members’ selection and terms of office:
  • The government’s nominations to the MPC will be chosen by a Search-cum-Selection Committee chaired by the Cabinet Secretary, with the RBI Governor and Economic Affairs Secretary as members, as well as three specialists in economics, banking, finance, or monetary policy.
  • Members of the MPC will be appointed for a four-year term and are not eligible for re-appointment.
  • How are decisions made:
  • The majority vote will be used to make decisions, with each member having one vote.
  • The governor of the Reserve Bank of India will chair the committee. The governor, on the other hand, will not have a veto authority over the other members of the panel, but will have a casting vote in the event of a tie.
  • What is the Monetary Policy of the Reserve Bank of India?
  • The Reserve Bank of India’s policy relating to the deployment of monetary resources under its control for the aim of achieving GDP growth and lowering the inflation rate is referred to as ‘Monetary Policy.’
  • The RBI is empowered to make monetary policy under the Reserve Bank of India Act of 1934.
  • What is the goal of the monetary policy?
  • Price stability, economic growth, equity, social justice, and fostering the establishment of new financial companies are all important facets of India’s monetary policy, according to the Chakravarty Committee’s recommendations.
  • While the Indian government strives to increase the country’s GDP growth rate, the Reserve Bank of India (RBI) works to control inflation at a manageable level.
  • The Monetary Policy Committee calculates the appropriate policy interest rate to help meet the country’s inflation target in order to achieve its key objectives.
  • What are the different types of monetary policy instruments and how are they managed?
  • There are two sorts of monetary policy instruments: qualitative and quantitative instruments.
  • Open Market Operations, Bank Rate, Repo Rate, Reverse Repo Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Marginal Standing Facility, and Liquidity Adjustment Facility are among the quantitative instruments (LAF).
  • Direct action, change in the margin money, and moral suasion are all examples of qualitative instruments.

 

  • Source : The Hindu

 

2 – Issue of Delay in Local Body Elections:

 GS II

Election related issues 
  • Context: 
  • The Supreme Court of India has directed the State Election Commission of West Bengal to notify the elections for local bodies in 2 weeks time.
  • The responsibility of the State Election Commission in conducting elections for urban and rural local governments is as follows:
  • Despite the fact that the Constitution was revised more than a quarter-century ago to create urban and rural local bodies a self-contained third tier of government, experts frequently concur that the devolution of powers to them is insufficient.
  • This may help to explain their lack of independence.
  • However, another aspect of how these local councils operate is that the manner in which their delegates are elected is frequently fraught with controversy.
  • Local elections are frequently marred by violence and accusations of arbitrary ward delimitation and reservation.
  • State Election Commissioner:
  • The State Election Commission has been tasked with holding free, fair, and impartial elections for the state’s local governments.
  • State Election Commissions were established for each state under the 73rd and 74th constitutional amendment acts to conduct elections to panchayats and municipalities.
  • The Governor appoints him or her. The governor will also establish his service conditions and length of office.
  • SEC will be removed from his position in the same way and on the same grounds as a High Court Judge.
  • On the recommendation of the parliament, the President can remove a high court judge from office.
  • Article 243K(1) states that a State Election Commission, consisting of a State Election Commissioner appointed by the Governor, is in charge of supervising, directing, and controlling the preparation of electoral rolls for, and the conduct of, all elections to Panchayats (Municipalities under Article 243ZA).
  • Article 243K(2) indicates that tenure and appointment will be determined by state assembly legislation. The State Election Commissioner, on the other hand, may not be dismissed from office except in the same manner and on the same grounds as a High Court Judge.
  • State Election Commissioner independence and autonomy:
  • The degree to which the State Election Commissioner, the entity in charge of overseeing the elections, is independent and autonomous is a critical aspect in ensuring that local body elections are conducted in a free and fair way.
  • Unfortunately, in the United States, most governments choose top bureaucrats from among their favourites for this position.
  • SECs are regularly accused of being political in practise. Routine tasks like ward delimitation, rotating special wards for women and Scheduled Castes, and setting election dates become fraught with controversy.
  • As a result, the opposition believes the exercise is being carried out in the interests of the ruling party.
  • Even if this cannot be generalised to all States and all persons in positions of authority, it is obvious that SECs do not appear to enjoy the same level of confidence from political parties and the general public as the Election Commission of India in terms of their independence.
  • What was the Supreme Court’s decision on the State Election Commissioner?
  • In this context, the Supreme Court’s decision that a State Election Commissioner should be fully independent of the State government takes on added significance.
  • It has called the Goa government’s request for its Law Secretary to take on additional responsibilities as SEC a “mockery of the Constitutional mandate.”
  • The Court has urged all SECs who are under the direct authority of the individual State governments to resign by utilising its extraordinary power under Article 142 of the Constitution.
  • Most states, in practise, appoint retired bureaucrats to serve as SECs. It remains to be seen if the Supreme Court’s ruling will have any impact on persons who are no longer employed by state governments.
  • However, it is evident that these administrations will have to find a means to pick only those who are truly independent and not in any way beholden to them.

 

  • Source : The Hindu

  

3 – State Human Rights Commisssion:

 GS II

 Statutory and Non-Statutory Bodies 
  • Context:
  • A report has been submitted recently by the Pune Rural Police to the State Human Rights Commission of Maharashtra stating that no evidence has been found against the Hindutva Leader SambhajiBhide, and that he has been removed from the Koregaon Bhima Violence case.
  • About SHRC:
  • SHRC looks into human rights violations in the areas mentioned in the state list and concurrent list. If the NHRC or another statutory commission has already looked into it, the SHRC will not look into it. The objectives and responsibilities are the same as the NHRC.
  • It consists of a chairperson and two members. Chairman should be retired chief justice of HC and members should be a sitting or retired judge of HC or district judge with 7 years experience and a person with expertise or practical experience in field of human rights.
  • The Governor appoints the Chairperson and members of the SHRC, based on the recommendations of a committee that includes:
  • The Prime Minister of Canada (chairperson)
  • The Minister of the Interior
  • The legislative council’s Leader of the Opposition
  • The legislative assembly’s Leader of the Opposition
  • The Speaker of the House of Representatives
  • The Legislative Council’s Chairman
  • Only the CJ of the high court can appoint a serving judge of the HC or a sitting district judge.
  • Members are ineligible for any appointment in the federal or state government once they leave office.
  • Members are eligible for reappointment if they meet certain age requirements.
  • The term is 70 years old or 5 years.
  • Bankruptcy, unsound mind, infirmity of body or mind, condemned to incarceration for a crime, or engages in paid employment are all reasons for removal by the president.
  • If a SC inquiry finds him guilty of misbehaviour or incapacity, he might be dismissed. They have the option to quit by writing to the governor.
  • Powers:
  • The commission has the same authority as a civil court and can hear cases if they are filed within one year of the incident.
  • It has the power to recommend victim restitution and the prosecution of the accused. However, such suggestions aren’t legally binding.
  • It sends special or annual reports to state legislatures, detailing the actions taken in response to their recommendations and the reasons for refusing to accept advise.

 

  • Source : The Hindu

  

4 – CRR vs SLR:

 Prelims Specific Topic 

  • Context:
  • The RBI has recently increased the repo rate in the meeting of the Monetary Policy Committee. In this context, Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are also very important.
  • What is CRR:
  • The Cash Reserve Ratio is a money market tool used by the Reserve Bank of India to control the flow of funds into the market.
  • CRR is a proportion of total deposits that the Reserve Bank of India (RBI) directs commercial banks to retain as a reserve with the RBI.
  • One of the most crucial tools is this. This is a great tool for controlling the market’s money flow.
  • If the CRR ratio is high, bank deposits with the RBI rise, reducing the bank’s ability to lend, raising interest rates as borrowing becomes more expensive and the flow of money in the market falls, lowering inflation.
  • This is how the CRR ratio is used as a money market instrument to assist control inflation.
  • Similarly, as the percentage of CRR ratio decreases, bank deposits with RBI decrease, resulting in an increase in the bank’s capacity to lend and, as a result, a decrease in interest rate as borrowing becomes cheaper and the flow of money in the market increases, inflation rises, or we can say that market liquidity rises.
  • As a result, the CRR might be considered a successful weapon utilised by the RBI to keep inflation under control.
  • Example:
  • Let’s say a bank has 100 rupees and the CRR is 4%. As a result, the bank will give the RBI 4 rupees and retain 96 rupees, which it will distribute in the market as a loan. Now that the RBI has increased the CRR to 5%, the bank will have to give the RBI 5 rupees and will only have 95 rupees remaining, reducing the commercial bank’s lending power.
  • What is SLR:
  • SLR stands for Statutory Liquidity Ratio.
  • The RBI also uses the ratio to control the flow of money in the market and to accommodate depositors’ urgent demands.
  • SLR is kept not just in monetary form, but also in cash, gold, and other RBI-approved securities.
  • The goal of keeping SLR is to have a sum in liquid assets that can be used to deal with a sudden surge in demand for the amount from the depositor.
  • It is utilised by the RBI to limit credit facilities granted by banks to borrowers in order to maintain the bank’s soundness.
  • SLR is defined as a percentage of the bank’s net time and demand liability.
  • We define net time and demand liability as the amount payable to the customer after an interval, and demand liability as the amount payable to the customer when he requests it.
  • SLR also protects the bank from a bank run and gives customers trust in the banking system.
  • Example:
  • If a bank has 100 rupees and the SLR is 20%, the bank must retain those 20 rupees on hand and cannot use them to make loans. Out of 100 banks, just 80 rupees are available for lending.

 

  • Source: The Hindu

 

5 – Places in News – Ukraine:

 Prelims Specific Topic 

  • Context:
  • Violence has been going on in the cities of Ukraine amidst the ongoing attacks by Russia.
  • About Ukraine:
  • It is an Eastern European country.
  • Belarus to the north, Russia to the east, the Sea of Azov and the Black Sea to the south, Moldova and Romania to the southwest.
  • To the west, Hungary, Slovakia, and Poland
  • Kyiv (Kiev), the country’s capital, is situated on the Dnieper River.
  • The Dnieper, Dniester, Southern Buh, and Siversky Donets are some of Ukraine’s most famous rivers.
  • The majority of Ukraine’s rivers run into the Black Sea and the Azov Sea, both of which are part of the larger Mediterranean basin (flow in a southerly direction).
  • Kyiv, Kharkiv, Odessa, Donbass Region, Mykolaiv, Mariupol, Simferopol, and other important cities

 

  • Source : The Hindu

UPSC Civil Services Daily Current Affairs 5th May 2022

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