Daily Current Affairs : 11th & 12th February 2022

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Daily Current Affairs for UPSC CSE

Topics Covered

  1. RBI Monetary Policy
  2. Model police act
  3. Anti Defection
  4. Quad
  5. Facts for Prelims

1 . RBI Monetary Policy

Context : The RBI on Thursday decided to keep the benchmark repo rate unchanged at 4% and reiterated its ‘accommodative’ policy stance in a bid to ensure the economy’s recovery from the COVID-19 pandemic becomes durable and broad-based. The improving outlook for inflation gave it room to focus on growth, the RBI added.

Key decisions / Observations

  • Kept policy interest rates unchanged and by a 5-1 majority voted to continue the ‘accommodative’ stance as long as necessary to revive and sustain growth on a durable basis while ensuring that inflation remains within the target going forward.
  • Flagging potential downside risks from the “highly contagious Omicron variant”, the MPC noted there had been some loss of momentum in economic activity as reflected in high frequency indicators. The demand for contact-intensive services is still muted,
  • MPC also noted that consumer price inflation has edged higher since its last meeting, but largely along anticipated lines”. Also, while core inflation remained elevated, demand-pull pressures were still muted
  • The renewed surge in international crude oil prices needs close monitoring
  • Stating that headline inflation would peak in the current quarter within the tolerance band and then moderate closer to target in the second half of 2022-23, he said this had provided room for policy to remain accommodative.
  • Taking into consideration the outlook for inflation and growth, in particular the comfort provided by the improving inflation outlook, the uncertainties related to Omicron and global spillovers, the MPC was of the view that continued policy support is warranted for a durable and broad-based recovery
  • Looking ahead, domestic growth drivers are gradually improving. Considering all these factors, real GDP growth is projected at 7.8% for 2022-23 with Q1 at 17.2%, Q2 at 7%, Q3 at 4.3%, and Q4 at 4.5%”.

About Monetary Policy

  • MonetaryPolicy refers to the use of monetary instruments under the control of the centralbank to influence variables, such as interest rates, money supply and availabilityof credit, with a view to achieving the objectives of the policy

Monetary Policy Committee

  • Section 45ZB of the amended RBI Act, 1934, also provides for an empowered six-member Monetary Policy Committee (MPC) to be constituted by the Central Government .
  • The Government, accordingly, constituted the six member MPC in September 2016.
  • The Monetary Policy Committee shall consist of:
    • the Governor of the RBI;
    • Deputy Governor of the RBI in charge of Monetary Policy;
    • one officer of the RBI to be nominated by the Central Board; 
    • three persons to be appointed by the Central Government 
  • The Monetary Policy Committee has been entrusted with the statutory duty to determine the Policy Rate required to achieve the inflation target.
  • The Reserve Bank’s Monetary Policy Department(MPD) assists the MPC in formulating the monetary policy.
  • Under the amended RBI Act, the MPC is required to meet at least four times in a year.
  • The quorum for the meeting of the MPC is four members. Each member of the MPC has one vote, and in the event of an equality of votes, the Governor of the RBI has a second or casting vote.
  • The decision of the Monetary Policy Committee is binding on the RBI and the RBI shall publish a document explaining the steps to be taken by it to implement the decisions of the Monetary Policy Committee

 Direct and Indirect instruments used for implementing monetary Policy

  • Repo Rate : The (fixed) interest rate at which the Reserve Bank provides overnight liquidity to banks against the collateral of government and other approved securities under the Liquidity Adjustment Facility (LAF).
  • Reverse Repo Rate : The (fixed) interest rate at which the Reserve Bank absorbs liquidity, on an overnight basis, from banks against the collateral of eligible government securities under the LAF
  • Liquidity Adjustment Facility (LAF) : The LAF consists of overnight as well as term repo auctions. Progressively, the Reserve Bank has increased the proportion of liquidity injected under variable rate repo auctions across the range of tenors. The aim of term-repo is to help develop the inter-bank term-money market, which in turn can set market-based benchmarks for pricing of loans and deposits, and hence improve transmission of monetary policy. The RBI also conducts variable interest-rate reverse-repo auctions, as necessitated under market conditions.
  • Marginal Standing Facility (MSF) : A facility under which scheduled commercial banks can borrow additional amount of overnight money from the Reserve Bank by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a limit at a penal rate of interest. This provides a safety valve against unanticipated liquidity shocks to the banking system
  • Corridor : The MSF rate and reverse repo rate determine the corridor for the daily movement in the weighted average call money rate.Bank Rate : It is the rate at which the Reserve Bank is ready to buy or re discount bills of exchange or other commercial papers. The Bank Rate is published under Section 49 of the Reserve Bank of India Act, 1934. This rate has been aligned to the MSF rate and, therefore, changes automatically as and when the MSF rate changes alongside policy repo rate changes.
  • Cash Reserve Ratio (CRR) : The average daily balance that a bank is required to maintain with the Reserve Bank as a share of such per cent of its Net demand andtime liabilities (NDTL) that the Reserve Bank may notify from time to time in theGazette of India.
  • Statutory Liquidity Ratio (SLR) : The share of NDTL that a bank is required tomaintain in safe and liquid assets, such as, unencumbered government securities, cash and gold. Changes in SLR often influence the availability ofresources in the banking system for lending to the private sector.
  • Open Market Operations (OMOs): These include both, outright purchase andsale of government securities, for injection and absorption of durable liquidity,respectively.
  • Market Stabilisation Scheme (MSS): This instrument for monetary management was introduced in 2004. Surplus liquidity of a more enduring nature arising from large capital inflows is absorbed through sale of short-dated government securities and treasury bills. The cash so mobilised is held in a separate government account with the Reserve Bank

Policy Stances of RBI

  • Accommodative Stance
    • Accommodative stance means the central bank is telling the market to expect a rate cut anytime
    • Usually, this policy is adopted when there is slowdown in the economy.
  • Neutral stance
    • Neutral stance doesn’t have any particular meaning. This means anything can happen anytime means the RBI would have the flexibility to either increase or decrease the policy rates
  • Tight and Calibrated Tightening stance
    • Tight – It indicates an impending rate hike
    • Calibrated Tightening – RBI would either keep the rates constant or increase the rates.

2 . Model Police Act

Context : The Parliamentary Standing Committee on Home Affairs expressed concern that even after 15 years, only 17 States have either enacted the Model Police Act, 2006, or amended their existing Act.

Key observations in the report

  • As many as 648 police stations in the country do not have telephones, a report by a parliamentary panel tabled in the Rajya Sabha on Friday said. Uttar Pradesh, one of the largest States, did not have phone connection in 75 police stations, while Jammu and Kashmir had 79 police stations without telephone connection. In Punjab, the number stood at 69.
  • Other than this, the largest shortfall was found in North-East States — 141 police stations in Assam, 54 in Arunachal Pradesh, 64 in Manipur, 62 in Meghalaya and 36 in Nagaland did not have telephone connection. The report said that 257 police stations did not have vehicles and 143 did not have wireless sets. The report was drafted by the Parliamentary Standing Committee on Home Affairs.

About Model Police Act

  • A Committee set up by Ministry of Home Affairs in September, 2005 submitted a draft Model Police Act on 30th October, 2006. A copy of the draft Model Police Act as framed by the Committee was sent to States for consideration and appropriate action vide Home Secretary’s D.O. letter dated 31st October, 2006.
  • The Model Act emphasized the need to have a professional police ‘service’ in a democratic society, which is efficient, effective, responsive to the needs of the people and accountable to the Rule of Law.
  • The Act provided for social responsibilities of the police and emphasizes that the police would be governed by the principles of impartiality and human rights norms, with special attention to protection of weaker sections including minorities (preamble to the Act).

Salient Features

  • Functional autonomy: While recognising that the police is an agency of the State and therefore accountable to the elected political executive, the Committee has specifically outlined the role of Superintendence of the State Government over the police. (Section 39). The Model Police Act suggested creation of a State Police Board (Sections 42-50) to frame broad policy guidelines for promoting efficient, responsive and accountable policing etc. Merit-based selection and appointment of the Director General of Police, ensuring security of tenures (Section 6), setting up of Establishment Committees (Section 53) to accept and examine complaints from police officers about being subjected to illegal orders, to recommend names of suitable officers to State Government for posting to all positions in the ranks of Assistant/ Deputy Superintendents and above in the police organisation in the State excluding the DGP etc.
  • Encouraging professionalism: To ensure an efficient, responsive and professional police service, the Model Act sought earmarking dedicated staff for crime investigation; and distinct cadre for Civil police vis-à-vis Armed Police
  • Accountability paramount: the Act prioritised police accountability, both for their performance and their conduct
  • Improved service conditions: The Act also aimed to provide better service conditions (Chapter XIV) to the police personnel including rationalising their working hours, one day off in each week, or compensatory benefits in lieu. It suggested creation of a Police Welfare Bureau to take care, inter alia, of health care, housing, and legal facilities for police personnel as well as financial security for the next of kin of those dying in service. It further mandates the government to provide insurance cover to all officers, and special allowances to officers posted in special wings commensurate with the risk involved.

State Subject

  • “Public Order” and “Police” are “State subjects” falling in Entry 1&2 of List-II of the Seventh Schedule of the Constitution of India. It is the State Governments/UT Administrations, which have to implement the various police reforms measures.

3 . Anti Defection Law

Context : West Bengal Assembly Speaker Biman Banerjee on Friday rejected a petition by a BJP legislator  seeking disqualification of Mukul Roy on the grounds that he defected to the Trinamool Congress from the BJP. The Speaker said in the facts and circumstances of the case and in law, he felt that the petitioner had not been able to prove the contention in the petition.

Background of Anti Defection Law

  • Indian political scene was besmirched by political defections by members of the legislature. This situation brought about greater instability in the political system.
  • Legislators used to change parties frequently, bringing about chaos in the legislatures as governments fell. In sum, they often brought about political instability. This caused serious concerns to the right thinking political leaders of the country.Several efforts were made to make some law to curb defections
  • Finally, in 1985, the Rajiv Gandhi government brought a Bill to amend the Constitution and curb defection.
  • Through 52nd constitutional amendment act 10th Schedule of the Constitution, which contains the anti-defection law, was added to the Constitution.

About Anti Defection Law

  • The purpose of the law is to curb political defection by the legislators.
  • The law applies to both Parliament and state assemblies.
  • There are two grounds on which a member of a legislature can be disqualified.
    • If the member voluntarily gives up the membership of the party, he shall be disqualified. Voluntarily giving up the membership is not the same as resigning from a party. Even without resigning, a legislator can be disqualified if by his conduct the Speaker/Chairman of the concerned House draws a reasonable inference that the member has voluntarily given up the membership of his party.
    • If a legislator votes in the House against the direction of his party and his action is not condoned by his party, he can be disqualified.

About Speaker’s Power under Anti Defection Law

  • The ultimate evaluator in the case of disqualification under the Tenth Schedule is the Speaker of the House.
  • The Speaker can disqualify a member-only if a claim of disqualification is made before him under Para 2 of the Tenth Schedule.
  • Under the light of Articles 102 and 191 of the Constitution and the Tenth Schedule, the Speaker’s exercise is of judicial nature as he can take a decision only after a member files a disqualification petition.

Exception from Disqualification

  • The 10th Schedule says that if there is a merger between two political parties and two-thirds of the members of a legislature party agree to the merger, they will not be disqualified.

Amendments

  • When it was enacted first, there was a provision under which if there occurs a split in the original political party and as a result of which one-third of the legislators of that party forms a separate group, they shall not be disqualified.
  • This provision resulted in large scale defections and the lawmakers were convinced that the provision of a split in the party was being misused. Therefore, they decided to delete this provision.
  • Now, the only provision which can be invoked for protection from disqualification is the provision relating to the merger

Is the law, as it stands now, open to interpretation?

  • The first ground for disqualifying a legislator for defecting from a party is his voluntarily giving up the membership of his party. This term “voluntarily giving up the membership of his party” is susceptible to interpretation. As has been explained earlier, voluntarily giving up the membership is not the same as resigning from a party.
  • The Supreme Court has clarified this point by saying that the presiding officer (Speaker), who acts as a tribunal, has to draw a reasonable inference from the conduct of the legislator.

Evaluation

  • The law certainly has been able to curb the evil of defection to a great extent. But, of late, a very alarming trend of legislators defecting in groups to another party in search of greener pastures is visible.
  • The recent examples of defection in state Assemblies and even in Rajya Sabha bear this out. This only shows that the law needs a relook in order to plug the loopholes if any. But it must be said that this law has served the interest of the society. Political instability caused by frequent and unholy change of allegiance on the part of the legislators of our country has been contained to a larger extent.

Conclusion

  • The anti-defection law seeks to provide a stable government by ensuring the legislators do not switch sides. However, this law also restricts a legislator from voting in line with his conscience, judgement and interests of his electorate. Such a situation impedes the oversight function of the legislature over the government, by ensuring that members vote based on the decisions taken by the party leadership, and not what their constituents would like them to vote for.
  • Political parties issue a direction to MPs on how to vote on most issues, irrespective of the nature of the issue. Several experts have suggested that the law should be valid only for those votes that determine the stability of the government (passage of the annual budget or no-confidence motions

Way Forward

  • Various expert committees have recommended that rather than the Presiding Officer, the decision to disqualify a member should be made by the President (in case of MPs) or the Governor (in case of MLAs) on the advice of the Election Commission.
  • This would be similar to the process followed for disqualification in case the person holds an office of profit (i.e. the person holds an office under the central or state government which carries a remuneration, and has not been excluded in a list made by the legislature).

4 . QUAD

Context : Calling for justice for the 26/11 terror attacks in Mumbai (2008) and the Pathankot airbase attack (2016) for the first time since the group was formed, the Foreign Ministers of Australia, India, Japan and the U.S. said the Quad was already cooperating on sharing intelligence on threats in the Indo-Pacific region.

About Quadrilateral Security Dialogue

  • The Quadrilateral Security Dialogue (QSD, also known as the Quad) is an informal strategic forum between the United States, Japan, Australia and India.

Formation of Quad

  • The forum was initiated as a dialogue in 2007 by Prime Minister Shinzo Abe of Japan. Quad was initiated to uphold strategic interests in the Indo-Pacific region and as a response to the growing Chinese clout. However, its origins go back to the time of the December 2004 Tsunami, when India undertook rescue and relief efforts for itself and the other affected neighbouring countries, and was joined by the US, Australia and Japan.
  • Malabar Naval Exercise started in 1992 as a bilateral exercise between India and the US, was expanded to occur annually, also taking in Japan as a permanent member in 2015. The year 2007 was a significant one, with the Malabar exercise seeing the participation of not just Japan, but also Australia and Singapore. The move irked China and the country promptly lodged its protest. Since then, Australia has been conspicuous by its absence in the exercise.
  • It was only after ten years – in 2017 – that the Quad was brought back into existence, on the sidelines of the ASEAN summit in Manila with the ‘India-Australia-Japan-US’ dialogue. Significantly, this coming together took place in the wake of India’s standoff with China in Doklam.

Objectives

  • Main objectives of Quad is to enhance connectivity, sustainable development, counter-terrorism, non-proliferation and maritime and cyber security, with a view to promoting peace, stability and prosperity in an increasingly inter-connected Indo-Pacific region

Cooperation within Quad

  • Main emphasis of quad is on connectivity they are making a coordinated effort to provide financing and sustainable alternatives to China’s Belt and Road Initiative (BRI), which has led many nations to take loans and accept infrastructure bids from Beijing.
  • Each of of the Quad countries is coordinating their responses on infrastructure projects in their spheres of influence, including India and Australian efforts in the Pacific islands, India-U.S. coordination in South Asia and the Indian Ocean region, and India-Japan joint efforts to develop projects in Sri Lanka, Bangladesh and Myanmar.
  • The military aspect of the Quad has also grown: India has strengthened its naval ties with each of the other Quad countries, and there have been more interactions, formal and informal at the official, political and military levels.

Importance of Quad for India

  • It is believed, that the forum strategically counters China’s economic and military rise. As a member of the Quad, in the event of rise in the Chinese hostilities on its borders, India can take the support of the other Quad nations to counter it. In addition, India can even take the help of its naval front and conduct strategic explorations in the Indo-Pacific region.
  • The Quad arrangement gives India an opportunity to work multilaterally on all kinds of initiatives that can help create, a free and open Indo Pacific region.
  • Quad gives New Delhi a powerful platform to advance its interests in East Asia, coordinate strategies with powerful friends and add more strength to its Act East initiative.
  • All four countries have common interests in maintaining a stable balance of power in the region, freedom of the seas, an open rules-based economic order, to counter debt-trap diplomacy and to limit the use of coercion by a state to assert territorial claims.

Challenges for India

  • India’s vision of the Indo-Pacific rests more on the Indian Ocean and less on the Pacific Ocean, where Chinese assertiveness arouses the most concern from the United States, Australia, and Japan. For India, the Indo-Pacific framework stretches from the east coast of Africa to the western and southern Pacific and includes portions of the Middle East. In contrast, the United States includes neither Africa nor the Middle East in its conception of the Indo-Pacific.
  • India is uncomfortable with any conception of the Quad as an anti-China “alliance of democracies” (as U.S. President Joe Biden has put it). India supposedly jettisoned nonalignment after the end of the Cold War, but it is still not willing to enter into an alliance with any country or group. India is certainly worried about a rising China but also faces the reality that, as of this year, China overtook the United States to become its number-one trading partner.
  • Another dilemma India faces is that any formal grouping of democracies through the Quad could raise expectations that it will be a vigorous proponent of promoting democracy abroad. But that will not sit well with India, which has traditionally refrained from advocating for democracy and democratic ideals in its foreign policy. It is also extremely sensitive to criticism, and any references to the rising authoritarianism and illiberalism that the Modi government has been accused of will potentially derail relationships.

5 . Facts for Prelims

Defence estate Organisation

  • The Defence Estates Organisation is responsible for the management of defence lands and the municipal administration of 62 cantonments.

Milan 2022

  • Milan 2022 is the largest multilateral exercise in this region, which will see participation of all major Navies including Quad countries, Russia and from West Asia amid tensions in Ukraine and developments in West Asia.
  • Exercise Milan is scheduled to be held from February 25 to March 4 for which 46 countries have been invited.
  • The harbour phase is scheduled from February 25 to 28 and the sea phase from March 1 to 4.
  • It has several themes such as ant-submarine warfare among others along with deliberations, including by subject matter experts.
  • During the exercise, the Navy will also be showcasing its Deep Submergence Rescue Vessel (DSRV) capabilities meant to rescue submarines in distress. India is one of the few countries in the region which possesses this capability.

Presidential Fleet Review

  • President Ram Nath Kovind will review the Navy’s fleet, which is done by every President once in his term, later this month in Visakhapatnam. For the review, more than 60 vessels of the Navy and Coast Guard, all of which have been made in the country, will participate.
  • This will be the 12th Presidential Fleet Review – the last one was conducted in 2016 under President Pranab Mukherjee.
  • According to the Navy, the fleet review is a “long-standing tradition followed by navies all across the world” and it is “an assembly of ships at a pre-designated place for the purpose of displaying loyalty and allegiance to the sovereign and the state
  • A fleet review is usually conducted once during the tenure of the President. So far, 11 Presidential Fleet Reviews have been conducted since Independence, of which two have been International Fleet Reviews, in 2001 and 2016.
  • By reviewing the ships, the head of the state, “reaffirms his faith in the fleet and its ability to defend the nation’s maritime interest” and such an exercise is done without any “belligerent intentions”.
  • In terms of significance, the Navy’s Presidential review is second only to the Republic Day Parade

Y Shaped belt

  • Soon, all “front-facing” seats, including middle-rear seats, will be required to have a “three-point” or Y-shaped seat belt, since it spreads the energy all over the body in the event of a collision

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