CA: 11 August 2023

Daily Current Affairs 11 August 2023

RBI bi-monthly Monetary Policy Highlights :

Following are the highlights of the bi-monthly monetary policy announced by the Reserve Bank Governor Shaktikanta Das on Thursday.

Policy Rates and Inflation Forecast:

• MPC maintained the policy repo rate at 6.5%.
• Inflation projection for the fiscal year 2023-24 was raised to 5.4% (from 5.1% forecast in June).
• Vegetable price surge, potential El Nino weather conditions, and global food prices were noted as contributing factors to inflation concerns.

Accommodative Stance and Growth:

• MPC aims to withdraw accommodative policies gradually to align inflation with targets while supporting growth.
• Despite a projected rise in inflation and weak external demand, the domestic economy's momentum is expected to remain stable.

GDP Growth Projection:

• The projection for real GDP growth in the fiscal year 2023-24 remains at 6.5%.

Liquidity Management:

• Banks were directed to maintain an incremental Cash Reserve Ratio (CRR) of 10% on increased deposits between May 19 and July 28.
• This measure intends to absorb surplus liquidity resulting from various factors, including the return of ₹2000 notes to the banking system.
• CRR unchanged and remains steady at 4.5%

Loan Interest Rates and Transparency:

• RBI plans to enhance transparency in interest rate resets of EMI-based floating interest loans.
• Borrowers will have the option to switch to fixed-rate loans or foreclose their loans.

Digital Payments and Technology:

• Artificial Intelligence (AI) to be used in UPI payments.
• Near Field Communication (NFC) technology to be deployed for offline payments via UPI-Lite.
• Transaction limits for small-value digital payments in UPI Lite raised to ₹500 from ₹200.

Current Account Deficit and Next MPC Meeting:

• RBI projects that the current account deficit will remain manageable in FY24.
• The next meeting of the RBI rate-setting panel (MPC) is scheduled for October 4-6.

CPI Inflation Projections:

• Q2 Projection: CPI inflation projection for Q2 is 6.2%.
• Q3 Projection: CPI inflation projection for Q3 is 5.7%.
• Q4 Projection: CPI inflation projection for Q4 is 5.2%.

Monetary Policy Committee (MPC) :

The Monetary Policy Committee (MPC) of India is a crucial statutory body responsible for formulating and implementing monetary policy in the country.

Composition of MPC :

Section 45ZB of the RBI act specifies that the MPC shall consists of 6 members.

• Governor of the RBI, as Ex officio chairman
• Deputy Governor of RBI responsible for the Monetary Policy
• An officer of the RBI nominated by the RBI central Board.
• Three persons to be appointed by the Central Government.

Appointments of this category must be from “persons of ability, integrity, and standing, having knowledge and experience in the field of economics or banking or finance or monetary policy.

For More Information Read - "Monetary Policy"

Chief Election Commissioner and other Election Commissioners (Appointment Conditions of Service and Term of Office) Bill 2023 Tabled in Rajyasabha

Revisions to the Election Commission's Operational Guidelines

Revocation: Election Commission (Conditions of Service of Election Commissioners and Transaction of Business) Act, 1991.

Appointment Protocol: The President is now tasked with appointing the Chief Election Commissioner (CEC) and other Election Commissioners (ECs) based on recommendations from a Selection Committee.

Composition of Selection Committee:

• Chairperson: Prime Minister
• Member: Leader of the Opposition in Lok Sabha or the leader of the largest party in opposition
• Member: Union Cabinet Minister nominated by the Prime Minister

Search Committee Responsibilities: A Search Committee, led by the Cabinet Secretary, will be responsible for shortlisting five candidates. This list will then be presented to the Selection Committee for consideration.

Eligibility Criteria for CEC and ECs: Individuals currently holding or previously having held positions comparable to that of a central government Secretary are qualified for these roles.

Compensation and Benefits: Compensation and benefits accorded will mirror those provided to the Cabinet Secretary.

Tenure: 

• The term of office for CEC and ECs remains unchanged, spanning six years or until the attainment of 65 years of age. 
• Furthermore, reappointment will not be permissible.

Conducting Proceedings: All proceedings should ideally yield unanimous decisions. In the event of differing viewpoints, a resolution will be determined by majority vote.

Resignation and removal :

• The process for removing a member of the CEC (Chief Election Commissioner) mirrors that used for Supreme Court judges. 
• It requires a robust two-thirds majority motion in both Houses of Parliament for safeguarding. 
• In case disputes arise, the CEC has the power to suggest the removal of an Election Commissioner. 
• Should circumstances necessitate stepping down, both the CEC and ECs (Election Commissioners) have the option to tender their resignations to the highest authority, which is the President.

What Forced Government to come up with this bill ?

In the case of Anoop Baranwal vs. Union of India, the Supreme Court ruled that the appointment of the President shall be carried out through a process involving the recommendation of a Committee comprising the following members:

• Prime Minister

• Leader of the Opposition in the Lok Sabha

• Chief Justice of India

Navigation with Indian Constellation - NaVIC

Why in news : 

• India's indigenous satellite navigation system, NavIC, comprising seven satellites and analogous to the American GPS, is set to be incorporated into Aadhaar enrolment devices nationwide. 
• The Department of Space (DoS) has conveyed this integration plan to the Parliamentary Committee of Science and Technology.
• Currently Aadhar enrolment kits are linked to GPS

About NaVIC:

• The Indian Regional Navigation Satellite System (IRNSS), also known as Navigation with Indian Constellation (NavIC), is an autonomous regional satellite navigation system developed by the Indian Space Research Organisation (ISRO).

• Its primary goal is to deliver precise position information services to users within India and an extended region spanning up to 1500 km beyond its borders.

NavIC offers two distinct types of services:

• Standard Positioning Service (SPS): This service is accessible to all users and provides accurate positioning information.

• Restricted Service (RS): The restricted service is encrypted and exclusively available to authorised users.

The primary service area of NavIC is expected to deliver position accuracy better than 20 meters. At present, the NavIC system comprises seven operational satellites strategically positioned in orbit:

• Three satellites are situated in Geostationary Orbit (GEO).

• Four satellites are located in an inclined Geosynchronous Orbit (GSO). 

These satellites collectively work together to ensure accurate and reliable navigation assistance.

Other Satellite based Navigation Systems:

• GPS - USA
• GLONASS - Russia
• Galileo - Europe
• Beidou - China

HeLa Cells:

Why in News: The family of Henrietta Lacks is settling a lawsuit against a biotechnology company it accuses of improperly profiting from her cells

• HeLa cells were the first Human cells to be successfully cloned in 1953.

• HeLa cells hold a unique place in scientific research as an immortal cell line that has been widely utilised for decades. Originating from cervical cancer cells taken from Henrietta Lacks on February 8, 1951, HeLa cells are named after her. 

• Despite the unfortunate circumstances surrounding their procurement without her knowledge or consent, these cells have proved invaluable due to their extraordinary durability and prolific nature.

• Cell biologist George Otto Gey's discovery that HeLa cells could be kept alive and propagated marked a turning point. 

• Unlike previous attempts with human cells that could only survive for a short period, HeLa cells exhibited exceptional longevity. 

• This attribute enabled the development of a reliable cancer research method to determine the malignancy of cell lines, which remains in use today. Even space exploration pioneers utilised HeLa cells during the early missions.

The contributions of HeLa cells in the realm of medical breakthroughs have been profound. 

• Their utilisation spans various domains, including studies on the effects of zero gravity in space, the formulation of vaccines against polio and COVID-19, research into leukaemia, the AIDS virus, and cancer on a global scale. 

Despite the existence of numerous other cell lines today, HeLa cells continue to underpin advancements across diverse medical research fields, serving as a testament to their enduring significance.

Terms in News:

Repo Rate :

• Repo means - Repurchase Option and it is also called 'Ready Forward Transaction'
• Repo rate is the rate at which RBI lends money to commercial banks against government securities as collaterals.
• Changes in the repo rate directly affects the cost of borrowing.
• Increase in the Repo rate results in increased cost of borrowing leading to reduced money supply and vice versa.
• Repo rate is our policy rate to control inflation.

Inflation: 

• Inflation refers to the sustained and general increase in the prices of goods and services within an economy over a period of time. 
• It essentially means that, on average, the purchasing power of money decreases as it takes more units of currency to buy the same amount of goods and services. 

Deflation:

• Deflation refers to a sustained and general decrease in the prices of goods and services within an economy over a period of time. 
• In a deflationary environment, the purchasing power of money increases as it takes fewer units of currency to buy the same amount of goods and services. 

Incremental Cash Reserve Ratio:

The incremental cash reserve ratio (ICRR) is a monetary policy tool used by the Reserve Bank of India (RBI) to absorb excess liquidity in the banking system following the increased deposits in the banks. It is a percentage of the increase in deposits that banks must hold as cash with the RBI.

The ICRR is a temporary measure that will be reviewed by the RBI in due course. It is designed to help the RBI to bring down the excess liquidity in the banking system and to prevent inflation.

The ICRR is different from the cash reserve ratio (CRR), which is a fixed percentage of all deposits that banks must hold as cash with the RBI.

Cash reserve ratio:

• CRR is the percentage of bank's total deposits that it required to keep in the form of cash reserves with the RBI.
• By adjusting the CRR, the RBI can influence the liquidity in the banking system.
• Increasing the CRR reduces the lendable amount of banks and vice versa.
• CRR is mandated under RBI Act, 1934

Consumer Price Index:

• The Consumer Price Index (CPI) is a commonly used economic indicator that measures the average change over time in the prices paid by consumers for a fixed basket of goods and services. 
• It is designed to reflect the general inflation experienced by households and individuals in a specific region or country.
• In India CPI is calculated by, The National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI).

Cloud Burst:

• Cloud Bursts are localised, short duration, Intense rainfall activity.
• According to the Indian Meteorological Department (IMD), an unexpected precipitation exceeding 100mm (or 10 cm) per hour over a geographical region of approximately 20 to 30 square km is a cloudburst.

Military Exercises :

Exercise Malabar : 

It is Joint naval exercise between 4 Indo-Pacific Countries: Australia, India, Japan and the United States of America

Places In News:

1. Hawaii (capital : Honalulu)

  Why in News : The Wild Fires scorched thousands of acres and put homes, businesses and 35,000 lives at risk.

• Geography: It is an island (Archipelago) state of United States of America situated in pacific Ocean.

• Highest Peak : Mauna Kea 

• Important volcanoes:

• Kohala (extinct), 
• Mauna Kea (dormant), 
• Hualalai (dormant),
• Mauna Loa (active), 
• Kilauea (active)

2. Equador:(Capital: Quito)

Why in news : Emergency has been imposed due to assassination of politician. 

Geographical Borders:

• Situated in the northwestern region of South America, 

• this nation's territorial boundaries are connected with Colombia to the north, Peru to the east and south, while its western periphery is embraced by the Pacific Ocean. 

• Additionally, the Galapagos Islands fall within its administrative jurisdiction.

Highest Peak: Mount Chimborazo located in the Andes Range of Mountains.