(PRELIMS + MAINS FOCUS)
Repo rate remains unchanged at 4%
Part of: GS Prelims and GS – III – Economy
- RBI’s Monetary Policy Committee (MPC) has decided to keep its repo rate unchanged at 4%, in line with market expectations.
- RBI will maintain its ‘accommodative stance’ as long as required to sustain growth on a durable basis.
- The RBI maintained its GDP growth forecast at 10.5% for 2021-22.
- RBI also announced a series of measures to inject liquidity in the government securities market and the financial system.
- It will ensure orderly conduct of government borrowing programmes.
- In this respect, it announced a secondary market government securities (G-sec) acquisition plan worth Rs 1 lakh crore for April-June.
- RBI has decided to set up a committee to review the working of Asset Reconstruction Companies to ensure how better these entities can support the financial sector.
- In the policy review, the RBI decided to extend the RTGS and NEFT payments platforms to prepaid payment instruments, white label ATMs as well.
PLI Scheme ‘National Programme on High Efficiency Solar PV Modules’ approved
Part of: GS Prelims and GS – III – Economy
- The Union Cabinet has approved the Ministry of New & Renewable Energy’s proposal for implementation of the Production Linked Incentive (PLI) Scheme ‘National Programme on High Efficiency Solar PV (Photo Voltic) Modules’ for achieving manufacturing capacity of Giga Watt (GW) scale in high efficiency solar PV modules with an outlay of Rs.4,500 crore.
- Solar PV manufacturers will be selected through a transparent competitive bidding process.
- PLI will be disbursed for 5 years after commissioning of solar PV manufacturing plants, on sales of high efficiency solar PV modules.
The outcomes/ benefits expected from the scheme:
- Additional 10,000 MW capacity of integrated solar PV manufacturing plants
- Direct investment of around Rs.17,200 crore in solar PV manufacturing projects
- Demand of Rs.17,500 crore over 5 years for ‘Balance of Materials’
- Direct employment of about 30,000 and Indirect employment of about 1,20,000 persons
- Import substitution of around Rs.17,500 crore every year
- Impetus to Research & Development to achieve higher efficiency in solar PV modules.
- PLI Scheme For Telecom And Networking Products
- PLI Schemes For Promoting Domestic Manufacturing Of Bulk Drugs & Medical Devices
- PLI Scheme approved for 10 more sectors
Development Finance Institution (DFI)
Part of: GS Prelims and GS – III – Economy
- The Union Cabinet cleared a Bill to set up a government-owned development finance institution (DFI) with initial paid-up capital of Rs 20,000 crore.
- By setting it up, Government can leverage around Rs 3 trillion from the markets in a few years to provide long-term funds to infrastructure projects and other developmental needs.
- Besides, the government will give Rs 5,000 crore as grant to the institution.
- The grant has been provided as tax-saving bonds.
- The amount will protect from loss if the DFI borrows from multilateral or bilateral institutions.
- The DFI will be fully government-owned initially and will be brought down to 26% in the next few years.
- At all times, the government will continue to hold 26% in the entity.
- The government will provide a 10-year tax exemption to funds invested in the DFI to attract long-term players such as insurance and pension funds.
PLI Scheme for White Goods (Air Conditioners and LED Lights )
Part of: GS Prelims and GS – III – Economy
- The Union Cabinet approved the Production Linked Incentive (PLI) Scheme for White Goods (Air Conditioners and LED Lights) with a budgetary outlay of Rs. 6,238 crore.
- The PLI Scheme for White Goods shall extend an incentive of 4% to 6% on incremental sales of goods manufactured in India for a period of five years to companies engaged in manufacturing of Air Conditioners and LED Lights.
- An entity availing benefits under any other PLI Scheme of Govt. India will not be eligible under this scheme.
- It will be implemented as a pan India scheme.
- A number of global and domestic companies, including a number of MSMEs are likely to benefit from the Scheme.
- Benefits: It is estimated that over the period of five years, the PLI Scheme will lead to incremental investment of Rs. 7,920 Crore, incremental Production worth Rs. 1,68,000 Crore, exports worth Rs 64,400 Crore, earn direct and indirect revenues of Rs 49,300 crore and create additional four lakh direct and indirect employment opportunities.
Do you know?
- A major appliance, also known as a large domestic appliance or large electric appliance is a non-portable or semi-portable machine used for routine housekeeping tasks such as cooking, washing laundry, or food preservation.
- Such appliances are sometimes collectively known as white goods, as the products were traditionally white in colour, although a variety of colours are now available.
Technology – CSF and Sheep Pox Vaccines
Part of: GS Prelims and GS – III – Sci & tech
- The ICAR-Indian Veterinary Research Institute, Izatnagar, Bareilly, Uttar Pradesh transferred the Technology – CSF and Sheep Pox Vaccines to M/s Hester Biosciences through Agrinnovate India Limited.
Important value additions
Live Attenuated Indigenous CSF Cell Culture Vaccine (IVRI-CSF-BS):
- The Classical Swine Fever (CSF) is an important disease of pigs that causes 100% mortality.
- In India, the disease is controlled by a lapinized CSF vaccine (Weybridge Strain, U.K.) produced by killing large numbers of rabbits.
- To avoid this, the ICAR-IVRI developed a Cell Culture CSF Vaccine using the Lapinized Vaccine Virus from foreign strain.
Indigenous Live Attenuated Sheep Pox Vaccine [SPPV Srin 38/00]
- Sheep pox is a severe viral disease in sheep.
- A live attenuated Sheep Pox Vaccine using indigenous strain was developed for preventive vaccination in the sheep population.
- The developed Vaccine uses indigenous Sheep Pox Virus Strain [SPPV Srin 38/00] and is adapted to grow in the Vero cell line which makes the Vaccine production to be easily scalable.
- GS-3: Challenges to Internal Security
Left Wing Extremism: Chhattisgarh Maoist ambush
Context: Twenty-three security personnel were killed and 33 injured on April 2nd in one of the deadliest Maoist ambushes ever in Bastar, Chattisgarh.
- A CoBRA commando has been captured by Maoists and are demanding interlocutor for negotiating his release.
- In this ambush, Maoists triggered blasts and then rained bullets and shells on the troops from well-camouflaged positions, inflicting heavy causalities.
- One of the survivors of the encounter said that they were attacked by over 400 Maoists from three sides. The ambush lines stretched over 2km.
- This is the second major attack since March 24 when Maoists blew up a bus carrying security personnel, killing five policemen and injuring 13 in neighbouring Narayanpur district.
- Complacency by government: The downward trend of Maoist violence over the last few years has led the government and some security analysts to declare that the battle against Maoism (or Naxalism, as the terms are interchangeably used) is almost won.
- Still the biggest Internal Security threat: Despite data revealing an overall reduction in violence, the capacity of Left-wing extremists to retaliate with ferocity indicates that Maoism still remains the biggest threat to our internal security. The recent attack is yet another reminder of the capability of Maoist cadres to lie low for long periods, regroup and strike at intervals.
- Chhattisgarh struggles: Since a crackdown on Maoists starting 2005 in Left Wing Extremism (LWE) states, other states have largely tackled the problem. The number of districts declared Naxal-affected is now just 90, down from over 200 in the early 2000s. Yet Chhattisgarh struggles
- Mass support to Maoists: There is a complete administrative and security vacuum in such areas to counter. The erosion of State authority is also reflected in the fact that civilians often act as the eyes and ears of the Maoists in affected areas.
- Federal Challenge: One problem is the federal nature of India, and the resistance of state governments. It limits what the Central government can do to tackle the challenges comprehensively.
- The overstretched policemen operating in these areas, without an adequate senior police leadership is at times making the operations against Maoists ineffective.
- Learnings from AP: The Greyhounds of undivided Andhra Pradesh, a specialised force that achieved great success in weakening the Maoists, conducted their operations with small-sized teams, acting on pinpoint intelligence. Even their platoon strength team had a clear chain of command.
- Building Infrastructure: While extending roads and hoisting mobile towers have certainly helped, CRPF will have to set up its camps deeper in the jungles. The Rural Roads Programme (RRP) aimed at constructing 5,411 kms and connecting 44 Naxal-affected districts, must also be speeded up as most of these districts fall in Chhattisgarh.
- Leadership by State Police: Maoism has been defeated only in states where the state police have taken the lead. Central forces have the numbers and the training, but they have no local knowledge or intelligence. Only local police can drive out Maoists
- The obliteration of Maoist violence in Andhra Pradesh is largely attributed to the state’s Greyhounds.
- In Maharashtra, where Maoists held sway over several districts, they have now been confined to border areas of Gadchiroli thanks to local police and the C60 force.
- West Bengal achieved normalcy through an ingenious strategy adopted by the state police.
- The Jharkhand Jaguars have gained an upper hand in the past few years, and Odisha has confined Maoist activity largely to Malkangiri thanks to broad administrative interventions in Koraput.
- There are two ways to confront insurgencies. One is to manage it at a low-key level, like New Delhi has done for decades in the North-East.
- The other is to go hammer and tongs, as the Sri Lankan forces eventually did against the LTTE, to finish off any serious resistance by the Tamil militants.
- GS-3: Conservation, environmental pollution and degradation
- GS-2: Effect of policies and politics of developed and developing countries on India’s interests
India Opposition to Net-Zero
John Kerry, the US President’s Special Envoy on Climate, is currently on a three-day visit to India trying to rekindle a climate change partnership that had been all but put on hold during the four years of the Donald Trump administration.
Also, virtual Climate Leaders’ Summit has been convened by US President Joe Biden on April 22-23, where the US is widely expected to commit itself to a net-zero emission target for 2050
Several other countries, including the UK, France and China have already enacted laws promising to achieve a net-zero emission scenario by the middle of the century.
India, the world’s third biggest emitter of greenhouse gases, after the US and China, is the only major player holding out.
The net-zero goal
- Net-zero, which is also referred to as carbon-neutrality, does not mean that a country would bring down its emissions to zero.
- Rather, net-zero is a state in which a country’s emissions are compensated by absorption and removal of greenhouse gases from the atmosphere.
- Absorption of the emissions can be increased by creating more carbon sinks such as forests, while removal of gases from the atmosphere requires futuristic technologies such as carbon capture and storage.
- This way, it is even possible for a country to have negative emissions, if the absorption and removal exceed the actual emissions. A good example is Bhutan which is often described as carbon-negative because it absorbs more than it emits.
- It is being argued that global carbon neutrality by 2050 is the only way to achieve the Paris Agreement target of keeping the planet’s temperature from rising beyond 2°C compared to pre-industrial times.
- Most impacted Country: Over the next two to three decades, India’s emissions are likely to grow at the fastest pace in the world, as it presses for higher growth to pull hundreds of millions of people out of poverty. No amount of afforestation or reforestation would be able to compensate for the increased emissions.
- Expensive Technologies Involved: Most of the carbon removal technologies right now are either unreliable or very expensive. India points towards the poor track record of developed countries on their commitment to provide money, and technology, to developing and poor countries to help them deal with the impacts of climate change.
- Not a part of Paris Climate Accord: The net-zero goal does not figure in the 2015 Paris Agreement, it only requires every signatory to take the best climate action it can. Countries need to set five- or ten-year climate targets for themselves, and demonstrably show they have achieved them. The other requirement is that targets for every subsequent time-frame should be more ambitious than the previous one.
- No need of parallel discussion: India has been arguing that instead of opening up a parallel discussion on net-zero targets outside of the Paris Agreement framework, countries must focus on delivering on what they have already promised
- Doesn’t involve any emission reduction targets: Theoretically, a country can become carbon-neutral at its current level of emissions, or even by increasing its emissions, if it is able to absorb or remove more.
- Dilution of CBDR Principle: From the perspective of the developed world, carbon neutrality is a big relief, because now the burden is shared by everyone, and does not fall only on them. This is seen as dilution of Common but Differentiated responsibilities (CBDR) and Historical responsibility principle of tackling Climate Change
- India is already doing more: Several studies have shown that India is the only G-20 country whose climate actions are compliant to the Paris Agreement. Even the actions of the EU and the US are assessed as “insufficient”. In other words, India is already doing more, relatively speaking, on climate than many other countries.
- Past record of developed countries: No major country achieved the emission-cut targets assigned to them under the Kyoto Protocol. India has been arguing that the 2050 carbon-neutrality promise might meet a similar fate, although some countries are now binding themselves in law. India has been insisting that the developed countries should, instead, take more ambitious climate actions now, to compensate for the unfulfilled earlier promises.
- Not totally opposing Carbon Neutrality: India has been saying that it does not rule out the possibility of achieving carbon-neutrality by 2050 or 2060. Just that, it does not want to make an international commitment so much in advance.
Connecting the dots:
(TEST YOUR KNOWLEDGE)
Model questions: (You can now post your answers in comment section)
- Correct answers of today’s questions will be provided in next day’s DNA section. Kindly refer to it and update your answers.
- Comments Up-voted by IASbaba are also the “correct answers”.
Q.1 What is the meaning of Repo Rate?
- When a bank is in need of cash it can it can discount bills of exchange and avail loan facilities from the Reserve Bank of India.
- When a bank has excess cash, they buy securities from RBI against cash on the condition that they resell the securities to RBI on a pre fixed day and price
- It is the rate at which RBI allows temporary loan facilities to commercial banks against government securities on the condition that the bank will repurchase the securities within a short period.
- It is a rate that is offered by banks to their most valued customers or prime customers.
Q.2 Consider the following statements regarding Development Finance institution:
- The government will give Rs 5 crore as grant to the institution.
- DFI will be fully government-owned initially and will be brought down to 50% in the next few years
Which of the above is or are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
ANSWERS FOR 7th April 2021 TEST YOUR KNOWLEDGE (TYK)
On Electoral Bonds:
on RBI keeping interest rates unchanged: