Current Affairs 13 June 2024 | Legacy IAS Academy (2024)

CONTENTS

1. RBI’s Aspirational Goals for India’s Fast-Growing Economy
2. Agnipath Scheme Faces Opposition
3. National Litigation Policy Approved by Union Ministry of Law and Justice
4. Authorised Economic Operator (AEO) Programme
5. Notified Disasters
6. Enterobacter Bugandensis
7. National Testing Agency

RBI’s Aspirational Goals for India’s Fast-Growing Economy

Context:

Recently, the Reserve Bank of India (RBI) has outlined several aspirational goals in preparation for India’s fast-growing economy, aiming to be “future-ready” by the time it reaches its centenary year, RBI@100.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

1. What are the Aspirational Goals of RBI?
2. What are the Challenges in Achieving the Aspirational Goals of RBI?
3. Steps to Reach the Aspirational Goals of RBI

What are the Aspirational Goals of RBI?

Capital Account Convertibility:

• Aim to achieve full capital account convertibility, allowing unrestricted conversion between the rupee and foreign currencies for capital transactions.

Non-Resident Transactions:

• Facilitate non-residents in using the rupee for cross-border transactions, improving rupee account accessibility for those outside India.
• Approach interest-bearing deposits for non-residents cautiously.
• Support Indian multinational corporations in making overseas investments.

Digital Payment Systems:

• Extend the use of India’s digital payment systems (UPI, RTGS, NEFT) both domestically and globally, and link them with other countries’ systems.
• Begin by integrating Indian payment systems with international ones.
• Implement the Central Bank Digital Currency (e-Rupee) gradually.

Banking Sector Alignment:

• Align the growth of the banking sector with national economic development.
• Strive to position 3-5 Indian banks among the top 100 global banks in terms of size and operations, establishing the Reserve Bank as a leading central bank for the global south.
• Assist the International Financial Services Centres Authority (IFSCA) in making GIFT City a premier international financial hub.

Monetary Policy and Economic Stability:

• Balance price stability with economic growth from the perspective of an Emerging Market Economy.
• Improve monetary policy communication and address debt overhang issues in key economies.
• Provide guidance for stress testing asset portfolios, enhance payment systems against climate risks, and propose disclosure norms and a government taxonomy for climate risks.

Trade and Investment Standardization:

• Standardize bilateral and multilateral trade invoicing, settlement, and payment in rupee and local currencies.
• Foster a global rupee market and recalibrate the foreign portfolio investor regime.
• Review taxes on rupee masala bonds.
• Include Indian Government Bonds in global bond indices.

What are the Challenges in Achieving the Aspirational Goals of RBI?

• Conflict of Roles:
  • Balancing the conflict between domestic monetary policy goals and the role as an international reserve currency issuer.
  • The Triffin dilemma, which might present a challenge in maintaining stability in India’s domestic economy while meeting global demand for the rupee.
• Exchange Rate Volatility:
  • Opening the currency to international markets can increase volatility in the exchange rate, especially initially. Fluctuations can impact trade and investments, affecting economic stability.
  • The rupee’s internationalization will lead to increased demand for the currency in global markets, potentially making Indian exports more expensive.
• Market Share:
  • The daily average share of the rupee in the global forex market is only about 1.6%, while India’s share of global goods trade is around 2%. The challenge lies in increasing the share of Indian products in the competitive global market.
• Convertibility:
  • The lack of full convertibility of INR for capital transactions will limit its extensive use in international trade and finance.
• Cybersecurity:
  • Digital payment systems are susceptible to cyberattacks, which can lead to fraud and financial loss. Robust security measures are essential to protect user data and ensure transaction safety.
• Banking Sector Health:
  • Indian banks, especially public sector ones, struggle with a high percentage of non-performing assets (loans unlikely to be repaid), making them less resilient in absorbing shocks during a global financial crisis.

Steps to Reach the Aspirational Goals of RBI

Full Capital Account Convertibility:

• According to the Tarapore committee, the objective is to achieve full convertibility by 2060, allowing free movement of financial investments between India and abroad.
• This would enable foreign investors to buy and sell the rupee more easily, increasing its liquidity and attractiveness. The RBI could use a Tobin Tax as a safeguard against currency speculation.

Preconditions for Capital Account Liberalisation:

• The committee listed several prerequisites including fiscal consolidation, inflation control, low levels of non-performing assets, a low current account deficit, and strengthening of financial markets.
• Specifically, fiscal deficits should be reduced below 3.5%, gross inflation rates should be lowered to 3%-5%, and gross banking non-performing assets should be brought down to less than 5%.

Personal Remittances and Investment Options:

• Introduce a more liberal scheme for personal remittances to facilitate easier foreign exchange transactions.
• Enable foreign investors and Indian trade partners to have more investment options in rupees, promoting its international use and developing the corporate bond market in India.

Trade Settlement Formalities:

• Optimise trade settlement processes for rupee import/export transactions, such as establishing rupee swap agreements with various countries and paying for Russian oil in Indian rupees.

Domestic Banking Expansion:

• Encourage the expansion of domestic banking through licensing reforms and incentivising branch network growth. Support Indian banks in enhancing their global presence through strategic partnerships and acquisitions.
• Provide support similar to that given to Khanij Bidesh India Ltd for banks involved in acquisitions, mergers, and collaborations with foreign banking institutions.

Monetary Policy Framework:

• Conduct a comprehensive review of the monetary policy framework to ensure alignment with the goals of price stability and economic growth.
• Enhance transparency and clarity in monetary policy communication to effectively manage market expectations, such as releasing meeting minutes.

Climate Risks and Resilience Measures:

• Issue guidelines for stress testing asset portfolios to assess climate change risks. Collaborate with financial institutions to develop resilience measures against climate-related risks in payment systems.
• Propose disclosure norms for climate risk reporting and contribute to the development of a standardised government taxonomy.

-Source: Indian Express

Agnipath Scheme Faces Opposition

Context:

The ruling-party government’s ambitious Agnipath scheme, announced in June 2022, has been facing opposition from various political parties and Armed Forces veterans. Ongoing concerns highlight the scheme’s impact on military recruitment and the welfare of soldiers.

Relevance:

GS II- Government policies and Interventions

Dimensions of the Article:

1. What is the Agnipath Scheme?
2. Issues Associated with the Agnipath Scheme

What is the Agnipath Scheme?

• Definition of Agniveer: The term “Agniveer” translates to “Fire-Warriors” and signifies a new military rank.
• Purpose: The scheme aims to recruit army personnel below officer ranks, such as soldiers, airmen, and sailors who are not commissioned officers, into the Indian Armed Forces.
• Duration of Service: Recruits, called Agniveers, serve for 4 years. After this period, up to 25% can join on a permanent commission (another 15 years), subject to merit and organizational requirements.
• Eligibility: All sailors, airmen, and soldiers, except the medical branch’s technical cadre, are eligible for recruitment under this scheme.
• Age Criteria: Candidates aged 17.5 to 23 years can apply. The upper age limit was increased from 21.
• Gender Inclusion: Girls within the given age limit are eligible, although there is no specific reservation for women under this scheme.
• Benefits in Case of Death: Families receive a combined sum of ₹1 crore, including the Seva Nidhi package and the soldier’s unserved salary.
• Disability Compensation: Agniveers can get up to ₹44 lakh based on the disability’s severity, provided it results from or worsens due to military service.
• Pension: Agniveers do not receive a regular pension after their 4-year service, unlike traditional soldiers. Only the 25% selected for permanent commission are eligible for a pension.
• Objective: The scheme aims to keep the armed forces young and reduce the number of permanent soldiers, thus lowering the government’s pension expenses on defense forces.

Issues Associated with the Agnipath Scheme

• Compensation: The scheme offers a one-time payment of ₹11.71 lakh after 4 years but no gratuity or pension.
• Discontent: This has led to widespread dissatisfaction among aspirants seeking job security and pension benefits.
• Inadequate Term: The 4-year term is seen as too short, potentially resulting in recruits lacking the same motivation and training as permanent soldiers.
• Training Concerns: The brief duration may be insufficient to adequately train and skill soldiers, possibly leading to a deficit in experience and skills within the armed forces.
• Age Limit: The upper age limit of 23 years has excluded many youths who missed recruitment opportunities during the pandemic.
• Limited Absorption: With only 25% getting permanent absorption, the scheme may worsen the already high youth unemployment rate.
• Economic Challenges: This issue is compounded by wider economic difficulties, including rising inflation and inequalities.
• Lack of Consultation: Critics argue that the scheme was rushed without adequate consultation, possibly as a political move before elections. The absence of endorsem*nt from defense forces raises further concerns.
• Cost-Cutting Measure: The scheme is viewed as a governmental effort to reduce defense pension expenditures, prioritizing financial savings over long-term force building.

-Source: The Hindu

National Litigation Policy Approved by Union Ministry of Law and Justice

Context:

With an aim to reduce the burden of pending court cases in which the government is a party, the Union Ministry of Law and Justice approved the National Litigation Policy, which will now be sent to the Cabinet for approval.

Relevance:

GS II: Polity and Governance

Dimensions of the Article:

1. Background of the National Litigation Policy
2. About the National Litigation Policy
3. Significance of the National Litigation Policy

Background of the National Litigation Policy:

• Current Scenario: Approximately 50 million legal cases are pending at various levels of the judiciary across India, making the government the country’s leading litigator.
  • For instance, the government accounts for 73% of all cases admitted by the Supreme Court.
• Policy History:
  • Launched in 2010 to make the government a more “responsible litigant,” but was not implemented.
  • Revived by the NDA government in 2015. In 2021, the then-Law Minister mentioned in a reply to the Lok Sabha that the policy was under consideration.
  • Recently, the policy was approved by the Union Law Minister as part of the BJP’s 2024 Lok Sabha election manifesto.

About the National Litigation Policy:

• Core Recognition: The government and its various agencies are the predominant litigants in Indian courts and tribunals.
• Objective: Transform the government into an efficient and responsible litigant.
  • Efficient Litigant:
    • Represented by competent and sensitive legal professionals.
    • Focus on core issues and address them directly.
    • Manage and conduct litigation cohesively, in a coordinated and time-bound manner.
    • Ensure good cases are pursued and unnecessary cases are avoided.
  • Responsible Litigant:
    • Avoid false pleas and technical points.
    • Ensure correct facts and all relevant documents are presented to the court.
    • No attempt to mislead any court or tribunal.
    • Prioritize litigation with emphasis on welfare legislation, social reform, and support for weaker sections.
• Policy Suggestions:
  • Review pending cases involving the government on a priority basis for quick disposal.
  • Implement a monitoring and review mechanism to sensitize the government on important cases and avoid delays.

Significance of the National Litigation Policy:

• Primary Purpose: Reduce government litigation in courts, allowing valuable court time to be used for resolving other pending cases.
• Judicial Efficiency: Aid in achieving the goal of the National Mission for Justice Delivery & Legal Reforms to reduce the average pendency time from 15 years to 3 years.
• Government Responsibility:
  • Protect citizens’ rights and respect fundamental rights.
  • Ensure those handling government litigation adhere to the principle of transparency and accountability.

-Source: Indian Express

Authorised Economic Operator (AEO) Programme

Context:

Recently, thegem and jewellery sector has been granted Authorised Economic Operator (AEO) status by theMinistry of Finance, easing export-import processes with shorter cargo release times and reduced bank guarantees.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

1. About Authorised Economic Operator (AEO) Programme
2. About World Customs Organization

About Authorised Economic Operator (AEO) Programme

• An AEO is a business entity engaged in international goods movement, requiring compliance with national customs law standards.
• Approval is granted by or on behalf of the national administration, adhering to the World Customs Organization (WCO) guidelines.
• The WCO adopted the SAFE Framework of Standards (WCO SAFE FoS) in June 2005 to enhance international supply chain security, with AEO being one of its foundational pillars.
• AEO fosters closer collaboration between customs departments and the trade industry.
• The Indian AEO programme is based on the WCO SAFE FoS.

Overview of the AEO Programme

• Introduced in India by the Central Board of Indirect Taxes and Customs (CBIC) in 2011, the AEO programme is voluntary and administered by CBIC.
• Aims to provide benefits such as simplified customs procedures and expedited customs clearances to business entities offering high security guarantees in the supply chain.
• Entities with AEO status are considered reliable and secure trading partners, allowing customs resources to focus on higher-risk businesses.

Benefits of AEO Status

• Direct port delivery and port entry for imports and exports respectively.
• Special focus on small and medium-scale entities; entities handling up to 25 import and export documents annually are eligible.
• Expedited drawback amount disbursal, refunds, and adjudications.
• Paperless declaration without supporting documents.
• Site inspection or examination upon request.
• Recognition by partner government agencies and stakeholders.

Eligibility for AEO Status

• Business entities engaged in customs-related activities in India can apply for AEO status regardless of size.
• Eligible entities include importers, exporters, Custom House Agents (CHA), Custodians or Terminal Operators, among others.

About World Customs Organization

• The World Customs Organization is an inter-governmental organization headquartered in Brussels, Belgium.
• WPO is noted for its work in areas covering international conferences, equipment, and equipment development, commodity classification, evaluation, collection of rules of origin, customs revenue, and other topics.
• The WTO takes account of the naming of International Relevant System (HS) goods, the technical aspects of the Trade Organisation (WTO), customs assessment, and rules of origin.
• TheWCO’sprimary objective is to enhance the efficiency and effectiveness of membercustomsadministrations, thereby assisting them to contribute successfully to national development goals, particularly revenue collection, national security, trade facilitation, community protection, and collection of trade statistics.

-Source: The Hindu

Notified Disasters

Context:

The ongoing spell of extreme heat in many parts of the country has once again reopened discussions on the inclusion of heatwaves as one of the notified disasters under the Disaster Management (DM) Act, 2005.

Relevance:

GS III: Disaster Management

Dimensions of the Article:

1. About Notified Disasters
2. National Disaster Management Authority (NDMA)
3. Disaster Management Act, 2005

About Notified Disasters:

• Definition: The Disaster Management Act, 2005, in India defines a disaster as a “catastrophe, mishap, calamity, or grave occurrence” arising from natural or man-made causes that result in substantial loss of life, destruction of property, or damage to the environment.
• Categories: The Act identifies 12 categories of notified disasters:
  • Cyclone
  • Drought
  • Earthquake
  • Fire
  • Flood
  • Tsunami
  • Hailstorm
  • Landslide
  • Avalanche
  • Cloudburst
  • Pest attack
  • Frost and cold waves
• Relief Assistance:
  • These disasters qualify for relief assistance under the State Disaster Response Fund (SDRF) and the National Disaster Response Fund (NDRF).
  • SDRF: Primarily used for immediate relief to victims of notified disasters.
  • NDRF: Supplements the SDRF in severe disaster cases where funds are insufficient.
• Heatwaves:
  • Currently, heatwaves are not included as a notified disaster under the Act, despite being a significant concern in India, especially in certain regions.
  • The Finance Commission has not yet expanded the list of notified disasters to include heatwaves.
• State Provisions:
  • States are allowed to use up to 10% of their SDRF allocation for local disasters, which can include heatwaves. Some states have already taken advantage of this provision.

National Disaster Management Authority (NDMA)

• National Disaster Management Authority, abbreviated as NDMA, is an apex Body of Government of India, with a mandate to lay down policies for disaster management.
• NDMA was established through the Disaster Management Act enacted by the Government of India in 2005. Hence, NDMA is a Statutory body.
• The vision of NDMA is “To build a safe and disaster resilient India by developing a holistic, proactive, multi-disaster oriented and technology - driven strategy through a culture of prevention, mitigation, preparedness and response”.
• NDMA is responsible for framing policies, laying down guidelines and best-practices for coordinating with the State Disaster Management Authorities (SDMAs) to ensure a holistic and distributed approach to disaster management.
• It is headed by the Prime Minister of India and can have up to nine other members. Since 2014, there have been four other members.
• The tenure of the members of the NDMA shall be five years.
• The phrase disaster management is to be understood to mean ‘a continuous and integrated process of planning, organising, coordinating and implementing measures, which are necessary or expedient for prevention of danger or threat of any disaster, mitigation or reduction of risk of any disaster or severity of its consequences, capacity building, preparedness to deal with any disaster, prompt response, assessing the severity or magnitude of effects of any disaster, evacuation, rescue, relief, rehabilitation and reconstruction’.

Disaster Management Act, 2005

• The Disaster Management Act, 2005, (23 December 2005) received the assent of The President of India on 9 January 2006.
• The Act extends to the whole of India.
• The Act provides for “the effective management of disasters and for matters connected there with or incidental thereto.”
• The Act calls for the establishment of National Disaster Management Authority (NDMA).
• The Act enjoins the Central Government to Constitute a National Executive Committee (NEC).
• All State Governments are mandated under the act to establish a State Disaster Management Authority (SDMA).
• The Chairperson of District Disaster Management Authority (DDMA) will be the Collector or District Magistrate or Deputy Commissioner of the district.
• The Act provides for constituting a National Disaster Response Force “for the purpose of specialist response to a threatening disaster situation or disaster” under a Director General to be appointed by the Central Government.
• Definition of a “disaster” in the DM Act states that a disaster means a “catastrophe, mishap, calamity or grave occurrence in any area, arising from natural or man-made causes.
• The objective of the Act is to manage disasters, including preparation of mitigation strategies, capacity-building and more.
• The Act contains the provisions for financial mechanisms such as the creation of funds for emergency response, National Disaster Response Fund and similar funds at the state and district levels.
• The Act also devotes several sections various civil and criminal liabilities resulting from violation of provisions of the act.

-Source: Indian Express

Enterobacter Bugandensis

Context:

Scientists from the Indian Institute of Technology Madras (IIT-M) and NASA’s Jet Propulsion Laboratory (JPL) have carried out a collaborative study of the behaviour of multi-drug resistant pathogens aboard the International Space Station (ISS).

Relevance:

Facts for Prelims

About Enterobacter Bugandensis:

• Introduction: Enterobacter bugandensis is a relatively new species within the Enterobacter genus. It was first identified in 2013, isolated from bloodstream infection cases in Uganda.

Key Characteristics:

• It is a Gram-negative, rod-shaped bacterium.
• Similar to other Enterobacter species, E. bugandensis is typically found in diverse environments, including soil, water, and the gastrointestinal tracts of animals and humans.
• This bacterium can cause various infections, mainly in immunocompromised individuals. The infections include bloodstream, respiratory, urinary tract, and wound infections.
• E. bugandensis has shown resistance to multiple antibiotics, complicating treatment efforts.
  • The resistance mechanisms may involve beta-lactamase production, efflux pumps, and mutations that reduce drug uptake.

What is the Multi-Drug-Resistant Pathogen?

• Definition: A multi-drug-resistant (MDR) pathogen is a microorganism that has developed resistance to multiple antimicrobial agents, typically three or more categories of antimicrobials.
• Scope: This resistance is observed in various microorganisms, including bacteria, viruses, and parasites.
  • The most concerning forms of MDR for public health are MDR bacteria that resist multiple antibiotics.

-Source: Down To Earth

National Testing Agency

Context:

Recently, The Supreme Court refused to stay the counselling for admissions of students to medical colleges over alleged paper leak and irregularities in the National Eligibility cum Entrance Test (NEET) undergraduate (UG) examination 2024.

Relevance:

Facts for Prelims

About National Testing Agency (NTA):

• Establishment: The NTA was established in 2017 by the Ministry of Education. It serves as a premier, specialist, autonomous, and self-sustained testing organization.
• Purpose: To conduct entrance examinations for admission or fellowship in higher educational institutions.

Functions:

• Conducting Exams: Administering entrance examinations for higher educational institutions.
• Creating Question Banks: Developing a question bank using modern techniques.
• Research and Development: Establishing a strong research and development culture.
• Collaborations: Working with international organizations like ETS (Educational Testing Services).
• Other Exams: Undertaking any other examination entrusted by the Ministries or Departments of Government of India/State Governments.

NEET (National Eligibility cum Entrance Test):

• Purpose: NEET is an entrance examination for students aspiring to pursue undergraduate medical courses (MBBS/BDS) and postgraduate courses (MD/MS) in government or private medical colleges.
• Objective: To standardize the admission process for medical and dental courses across India, ensuring a uniform evaluation of candidates’ eligibility.
• Conducted by: The NTA conducts NEET on behalf of the Ministry of Education.

-Source: Indian Express