Daily Current Affairs : 13th June

Topics Covered

1. Bimal Jalan Committee
2. Easy money policy
3. Hypersonice Technology demonstrator Vehicle
4. Fruit bats
5. PENCIL
6. E-Governance initiatives of Ministry of Tribal Affairs

1 . Bimal Jalan Committee

Context : The Bimal Jalan committee, which is looking into the size of capital reserves that the RBI should hold, will have one more meeting before finalising its report to be submitted to the apex bank by the month-end.

About Bimal Jalan Committee

• After the government started pushing the central bank to review its economic capital framework, the RBI board in consultation with Govt in November decided to set up a committee to review the issue.

Issue of Economic Capital Framework

What is Economic Capital

• Economic capital is the best estimate of required capital that financial institutions/Central Bank use internally to manage their own risk and to allocate the cost of maintaining mandatory capital to be maintained among different units within the organization.

Issue

• The most contentious of the issues that have cropped up between the government and the central bank recently is that of the RBI’s balance sheet. Some sections in the government have argued that the RBI is holding excess reserves, which should be transferred to the government. There are two material components to RBI’s reserves:
  • A Contingency Fund of Rs 2.5 lakh crore.
  • A Currency and Gold Revaluation Reserve of Rs 6.91 lakh crore.
• Most economists agree that a transfer from the unrealised gains in the currency and gold revaluation reserve is not possible without a sale of gold or foreign currency assets. Hence, the debate is centered around whether the central bank is holding excess contingency reserves and whether it should transfer any more funds to it in the future.
• The current economic capital framework followed by the RBI is not in public domain. A committee in 1997 had recommended that contingency reserves be maintained at about 12 percent of total assets. At present, these reserves are at about 7 percent.
• The government has argued it differently and is looking at the total capital on the RBI’s balance sheet, which it believes is excessive. According to one government calculation, the RBI may be sitting on Rs 3.6 lakh crore in excess capital.

Details of the Committee

• Former RBI Governor Bimal Jalan will be the committee’s chairman and former Deputy Governor Rakesh Mohan deputy chairman.
• The other members are Economic Affairs Secretary Subash Chandra Garg, RBI Deputy Governor N.S. Vishwanathan and two board members of the RBI — Bharat Doshi and Sudhir Mankad.

Terms of Reference

• The terms of reference of the committee would be to review status, need and justification of various provisions, reserves and buffers presently provided for by the RBI, keeping in mind ‘public policy mandate of the RBI, including financial stability considerations.’
• The committee will also review best practices followed by the central banks globally in making assessment and provisions for risks, to which central bank balance sheets are subjected.
• The panel would also suggest an adequate level of risk provisioning that the RBI needs to maintain, and to determine whether it is holding provisions, reserves and buffers in surplus or deficit of the required level.
• The committee would also propose a suitable profit distribution policy taking into account all the likely situations of the RBI, including holding more provisions than required and the RBI holding less provisions than required

2 . Easy money policy

Context : State Bank economists have opined that an easy monetary policy will be ineffective to push the sagging growth engine and that what is needed is more direct and quicker fiscal measures.

About Easy Money Policy

• An easy money policy is a monetary policy that increases the money supply usually by lowering interest rates.
• Since interest rates are lower, it is easier for banks and lenders to loan money, thus leading to increased economic growth

About the opinion of State banks economists

• As per the report an easy monetary policy with a reasonable tight fiscal deficit will be ineffective in addressing the existing demand slowdown
• Support from the monetary policy — the RBI cut its key rates for the third time in 2019 and also changed the policy stance to accommodative last week to a nine-year low — is most welcome, the report said, underlining the need for help on the fiscal front.
• Fiscal channel is more direct and quicker and financial system is in need of some serious repair the report said, adding “the government would do better with reasonable fiscal deficit assumptions and should be very clear of the fiscal consolidation path.”

3 . Hypersonice Technology demonstrator Vehicle

Context : The Defence Research and Development Organisation (DRDO) on Wednesday conducted the test of an indigenously developed Hypersonic Technology Demonstrator Vehicle (HSTDV) along with several critical technologies.

About HSTDV

• HSTDV is an unmanned scramjet demonstration vehicle that can cruise up to a speed of mach 6 (or six times the speed of sound) and rise up to an altitude of 32 km in 20 seconds
• It has a range of uses, including missiles of the future, and energy-efficient, low cost and reusable satellite-launch vehicle
• Through the HSTDV project the idea was to demonstrate the “performance of a scram-jet engine at an altitude of 15 km to 20 km, is on”.
• The HSTDV cruise vehicle is mounted on a solid rocket motor, which will take it to a required altitude, and once it attains certain mach numbers for speed, the cruise vehicle will be ejected out of the launch vehicle. The scramjet engine gets ignited automatically later.
• Besides its utility for long-range cruise missiles of the future, the dual-use technology will have multiple civilian applications too. For instance, it can be used for launching satellites

Ramjet Scramjet and Dual Mode Ramjet

• Ramjet, Scramjet and Dual Mode Ramjet (DMRJ) are the three concepts of air-breathing engines which are being developed by various space agencies. 
• A ramjet is a form of air-breathing jet engine that uses the vehicle’s forward motion to compress incoming air for combustion without a rotating compressor. Fuel is injected in the combustion chamber where it mixes with the hot compressed air and ignites. A ramjet-powered vehicle requires an assisted take-off like a rocket assist to accelerate it to a speed where it begins to produce thrust. Ramjets work most efficiently at supersonic speeds around Mach 3 (three times the speed of sound) and can operate up to speeds of Mach 6. However, the ramjet efficiency starts to drop when the vehicle reaches hypersonic speeds.
• A scramjet engine is an improvement over the ramjet engine as it efficiently operates at hypersonic speeds and allows supersonic combustion. Thus it is known as Supersonic Combustion Ramjet, or Scramjet.  A scramjet relies on high vehicle speed to compress the incoming air forcefully before combustion (hence ramjet), but whereas a ramjet decelerates the air to subsonic velocities before combustion, the airflow in a scramjet is supersonic throughout the entire engine. That allows the scramjet to operate efficiently at extremely high speeds
• A dual mode ramjet (DMRJ) is a type of jet engine where a ramjet transforms into scramjet over Mach 4-8 range, which means it can efficiently operate both in subsonic and supersonic combustor modes. 

4 . Fruit bats

Context : Looking to identify the source of the Nipah virus that has caused one confirmed infection in Kerala this month, scientists are examining if it came from a guava he had eaten. The reasoning is that the guava itself could have been infected by a fruit bat. The Nipah virus is zoonotic — it spreads primarily between animals and humans — and fruit bats are known to spread it.

About Fruit Bats

• Fruit bats, as opposed to insectivorous bats, survive largely on a diet of fruit, which they locate with their sense of smell
• Insectivorous bats locate their prey through echolocation, or by locating the source of the echoes of their own sound.
• Fruit bats belong to the Pteropodidae family; those in the Pteropus genus within this family are natural hosts for the Nipah virus. Such bats are widely found in South and South East Asia, and are also known as flying foxes.

5 . PENCIL Portal [Platform for Effective Enforcement of No Child Labour] 

Context : World Against Child Labour day is celebrated on June 12

About PENCIL Portal

•  The PENCIL is an electronic platform that aims at involving Centre, State, District, Governments, civil society and the general public in achieving the target of child labour free society. 
• The PENCIL Portal (pencil.gov.in) has various components, namely Child Tracking System, Complaint Corner, State Government, National Child Labour Project and Convergence.
• The Districts will nominate District Nodal Officers (DNOs) who will receive the complaints and within 48 hours of receiving, they will check the genuineness of the complaint and take the rescue measures in coordination with police, if the complaint is found to be genuine.

Importance

• India has ratified the two Core Conventions of International Labour Organization (ILO), Convention 138 regarding admission of age to employment and Convention 182 regarding worst forms of Child Labour in June 2017 which shows the country’s commitment to a child labour free nation.
• The National Child Labour Project Scheme (NCLPS) started in 1988 has the basic objective of suitably rehabilitating the children withdrawn from employment thereby reducing the incidence of child labour in areas of known concentration of child labour.
• In this regard, to further add impetus to establish a child labour free nation, the Platform for Effective Enforcement for No Child Labour (PENCIL) had been launched by the Ministry of Labour and Employment, Government of India.

6 . E-Governance Initiatives of Ministry of Tribal Affairs

Context : DBT Tribal and NGO Grants Online Application & Tracking System for bringing in greater e-Governance in implementation of welfare schemes for STs.

DBT Tribal

• In DBT Tribal portal, there are 3 main modules for Pre-Matric & Post-Matric Scholarship.
• Data Sharing module is mainly meant for sharing beneficiary-data by States.
• In Communication module, the States have facility to upload documents, raise query and DBT data uploaded by States is used for faster release of funds.
• Monitoring module has facility of MIS reports & Dashboards.
• Ministry has further developed module for verification of students by Universities and Colleges under Fellowship scheme and Grievance Module for all stake holders including beneficiary students in 03 Central Sector schemes and Institutions.

NGO Grants Online Application & Tracking System

• The NGO portal, developed for implementing scheme of Aid to Voluntary Organizations working for the welfare of STs, has been fully revamped & redesigned with simplified Application form, Inspection Report and Fund Processing module.