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Daily Current Affairs

20-April -2024- Top News of the Day

1. Israeli Military Strikes Iran in Apparent Response to Previous Attack, Tensions Remain High

Topic: GS2 – International Relations –

This topic is relevant for both Prelims and Mains as the incident highlights the ongoing tensions between Israel and Iran, two important players in the Middle East region.

 

Context:
  • Early on Friday, reports emerged of an Israeli military strike targeting Iran, marking Israel’s first military response to Iran’s recent attack.
  • However, the initial scope of the strike appeared to be limited, focusing on a military airbase near the city of Isfahan in central Iran.
  • Both Israeli and Iranian media initially downplayed the incident, suggesting a possible attempt by both sides to de-escalate tensions.
More about the news:

Israel’s Response and U.S. Involvement:

  • The Israeli military declined to comment on the strike, maintaining silence on the operation.
  • However, according to a senior U.S. official, Israel had notified the United States through multiple channels shortly before the attack, indicating a level of coordination between the two allies.
  • Despite the lack of official confirmation, reports suggest that the strike was carried out by Israel as a response to Iran’s previous actions.

Iran’s Reaction and Absence of Retribution Calls:

  • In the aftermath of the Israeli strike, there were no public calls for retribution from Iranian officials.
  • Iranian news agencies reported that nuclear facilities in Isfahan remained unharmed, indicating a relatively restrained response from Iran.
  • The absence of immediate retaliation signals a potential willingness by Iranian authorities to avoid further escalation of hostilities.

Decision-Making Process and Postponement of Widespread Strikes:

  • Israeli leaders reportedly deliberated on the possibility of ordering widespread strikes in Iran following the initial attack by Iran.
  • However, after Prime Minister Benjamin Netanyahu’s conversation with President Biden and considering the limited damage inflicted, the Israeli war cabinet decided to postpone any further decisions regarding military action.
  • This highlights the diplomatic considerations and strategic calculations involved in Israel’s response.

Iranian Perspective and Mode of Attack:

  • Iranian officials disclosed that the attack on Friday was executed using small drones, possibly launched from inside Iran.
  • Additionally, reports indicated that a separate group of small drones was intercepted and shot down in the Tabriz region, further illustrating Iran’s capacity for defense against aerial threats.

Conclusion:

  • Israel’s military strike on Iran reflects the complex dynamics and tensions in the region, with both sides demonstrating a cautious approach in the aftermath of the incident.
  • The absence of immediate escalation suggests a desire to avoid further confrontation, although the situation remains fluid and subject to rapid developments.
What Could be the Possible Solutions to De-escalate the Iran – Israel Conflict?

Sustainable Ceasefire and Two-State Solution:

  • Israel should accept a sustainable ceasefire in Gaza as soon as possible, open the borders for international humanitarian aid to Gaza, and respect the UN resolutions to end the 70-year-old crisis by realizing a two-state solution.
  • The two-state solution is the only feasible way ahead for long-term security, peace and stability in the region. It is not an easy goal, but both sides are familiar with the challenges and opportunities.
  • Dialogue and Diplomacy:
  • An international initiative must mediate a sustainable ceasefire between Israel and Iran. Encouraging both countries to engage in direct talks facilitated by international mediators could help build trust and find common ground.
  • Iran and Israel could engage in direct talks facilitated by a neutral third party, such as the European Union or the United Nations.
  • Addressing Nuclear Proliferation Concerns:
  • Iran could adhere to the terms of the Joint Comprehensive Plan of Action (JCPOA) and allow international inspections of its nuclear facilities to ensure compliance with the agreement.
  • In return, Israel could recognise Iran’s right to peaceful nuclear energy and commit to refraining from military strikes against Iranian nuclear facilities.
  • Regional Cooperation:
  • Promoting cooperation between Iran and Israel within the framework of regional organizations, such as the Arab League or the Gulf Cooperation Council, could help address shared security concerns and foster stability in the Middle East.
  • Developing a comprehensive regional security architecture that addresses the concerns of all stakeholders in the Middle East could contribute to stability and reduce the likelihood of conflict between Iran and Israel.
  • Long-Term Vision for the Middle East:
  • Regional powers could work together to establish a comprehensive security architecture for the Middle East, including confidence-building measures, arms control agreements, and mechanisms for resolving conflicts peacefully.
  • Addressing underlying issues, such as historical grievances, territorial disputes, and religious extremism, can help create an environment conducive to peace and reconciliation.
  • Normalization of Relations:
  • Iran and Israel could take steps towards normalizing diplomatic relations, such as exchanging ambassadors, reopening embassies, and facilitating people-to-people exchanges, similar to the peace agreements between Israel and some Arab states like the United Arab Emirates and Bahrain.

 

PYQ: Mediterranean Sea is a border of which of the following countries? (2017)

1) Jordan

2) Iraq

3) Lebanon

4) Syria

Select the correct answer using the code given below:

(a) 1, 2 and 3 only

(b) 2 and 3 only

(c) 3 and 4 only

(d) 1, 3 and 4 only

Ans: C

Practice Question:  Discuss the implications of Israel’s recent military strike on Iran for regional security dynamics in the Middle East. Analyze the factors contributing to the escalation of tensions between the two nations and evaluate the potential diplomatic and security challenges arising from such actions. (250 words/15 m)

2. MoD Plans Phased Augmentation of NCC to 27 Lakh Cadets Over Next Decade

Topic: GS2 – Governance – Government policies – Interventions for development in various sectors

This topic is relevant for both Prelims and Mains in the context of knowing facts about the National Cadet Corps (NCC) augmentation plan which reflects the government’s governance strategies aimed at enhancing youth participation in national development.

 

Context:
  • The Ministry of Defence (MoD) is devising a phase-wise augmentation plan for the National Cadet Corps (NCC), with the goal of increasing its strength from the current 17 lakh cadets to 27 lakh over the next decade.
  • This expansion aims to widen the reach of the tri-service organization, particularly focusing on educational institutions, with an emphasis on border areas.
  • The move comes in response to growing demand for NCC participation across educational institutions nationwide.
More about the news:

Objectives and Scope of NCC:

  • The NCC, operating on a voluntary basis in schools and colleges, plays a vital role in grooming and training youth in social services, discipline, and adventure activities.
  • While cadets receive basic military training in small arms, there is no obligation for them to participate in active military service post-training.
  • Completion of NCC training leads to the attainment of ‘A,’ ‘B,’ and ‘C’ certificates for junior and senior wing cadets, which hold weightage in various government job selections.

Phased Augmentation Plan:

  • The augmentation plan will be implemented in three phases. In the first phase, three lakh cadets will be added to the existing directorates covering all states and Union Territories.
  • Subsequent phases will witness a gradual increase in NCC strength by three and four lakh cadets, respectively.
  • Defence Minister Rajnath Singh approved the initial phase in March, highlighting the significant expansion of NCC’s reach over the years.

Significance and Historical Context:

  • This augmentation plan marks the first significant expansion of the NCC since 1979.
  • Prime Minister Narendra Modi’s announcement in his 2020 Independence Day speech laid the groundwork for training one lakh NCC cadets from coastal and border districts, with a notable focus on female cadets.
  • The standardization of NCC units’ organizational structure will facilitate more efficient training and management.

Implementation Strategy:

  • While the augmentation plan aims to increase NCC’s capabilities and international exposure opportunities, the Army has opted not to allocate additional manpower.
  • Instead, retired Junior Commissioned Officers (JCOs) and soldiers will be contracted as instructors.
  • Furthermore, the plan includes enhancing youth exchange programs and integrating NCC as an elective subject in college curricula, aligning with the New Education Policy’s

Conclusion:

  • The phased augmentation of the NCC underscores the government’s commitment to nurturing youth leadership and instilling values of discipline and service among the younger generation.
  • By expanding its reach and enhancing training capabilities, the NCC is poised to play an even more significant role in shaping India’s future leaders and contributing to national development.
About National Cadet Corps
  • It is a Tri-Services Organization, comprising the Army, Navy and Air Force, engaged in grooming the youth into disciplined and patriotic citizens.
  • It came into existence under the National Cadet Corps Act XXXI of 1948 under the Ministry of Defence (MoD).
  • It is a voluntary organization which recruits cadets from high schools, colleges and universities all over India.
  • The Cadets are given basic military training in small arms and parades. They are given preference in military service over normal candidates during selections.
  • Aims
  • To develop qualities of character, courage, comradeship, discipline, leadership, secular outlook, the spirit of adventure and sportsmanship and ideals of selfless service among the youth to make them useful citizens.
  • To create a human resource of organized, trained and motivated youth to provide leadership in all walks of life including the Armed Forces, and be always available for the service of the nation.
  • To create a suitable environment to motivate the youth to take up a career in the armed forces.
  • It is headed by the Director General (DG), an Army Officer of the rank of Lieutnant General.
  • Headquarter: New Delhi.

 

Practice Question:  Discuss the significance of the National Cadet Corps (NCC) augmentation plan proposed by the Ministry of Defence for enhancing youth participation and national security preparedness in India. Evaluate the potential challenges and opportunities associated with the implementation of this plan. (250 words/15 m)

 

3. Elon Musk's Visit Sparks Speculation: Tesla's Potential $2 Billion Investment in India

Topic: GS3 – Indian Economy –

This topic is relevant for both Prelims and Mains in the context of understanding the implications of foreign investments, especially in strategic sectors like electric vehicles.

 

Context:
  • Elon Musk, CEO of Tesla Inc., is anticipated to announce a significant investment exceeding $2 billion in a car manufacturing facility during his visit to India.
  • This move, alongside potential long-term investment commitments, signals Tesla’s interest in the Indian market.
  • Musk is scheduled to engage in discussions with India’s space startups and hold a meeting with Prime Minister Narendra Modi, indicating the strategic importance of his visit.
More about the news:

Challenges Faced by Tesla and India’s Electric Vehicle (EV) Market:

  • Tesla’s India visit coincides with challenges in its flagship company, marked by declining sales figures and stock market valuations.
  • Despite India’s burgeoning electric passenger car sales, the market share remains relatively small.
  • The government’s policy, offering reduced import duties for electric cars, aims to facilitate Tesla’s entry into the Indian market.
  • However, challenges such as ground clearance issues and charging infrastructure pose hurdles for Tesla’s Model 3 in Indian conditions.

Opportunities and Implications of Tesla’s Manufacturing Plans:

  • Setting up a manufacturing facility in India could represent a significant milestone for India’s auto sector, akin to Apple’s success in cellphone assembly.
  • The Indian government’s tariff policy break for Tesla aligns with its strategy to attract marquee brands and promote sectoral advancements.
  • Tesla’s potential investment holds promise for India’s EV vendor ecosystem and presents opportunities for future exports.

Evaluation of India’s EV Policy and Market Dynamics:

  • India’s new EV policy, which offers import duty cuts for car models priced over $35,000, aims to attract investments from global EV manufacturers.
  • However, the policy raises concerns about its compatibility with the Make in India initiative and the extent of tax benefits provided.
  • While the policy allows Tesla to assess market potential with limited import numbers, it signifies a shift in the government’s approach towards domestic manufacturing in the EV sector.

Conclusion:

  • Elon Musk’s visit to India and Tesla’s potential investment signify a significant development in India’s EV landscape.
  • While Tesla’s entry holds promise for technological advancements and market growth, challenges related to infrastructure and policy frameworks need to be addressed for sustainable growth in the EV sector.
  • The success of Tesla’s manufacturing plans in India could pave the way for broader collaborations and advancements in the automotive industry.
The EV market in India
  • The Indian EV market is witnessing rapid growth, with EV sales surging by over 45% in 2024 despite regulatory changes.
  • Total EV registrations surpassed 1.5 million units by the end of 2023, a significant increase from just over 1 million in the previous year.
  • The growth in EV registrations has elevated India’s overall EV market penetration to 6.3%, indicating significant progress in EV adoption.
  • Indian automakers are making substantial investments in electrification, encouraged by the government’s plan to eventually phase out subsidies.

 

PYQ: How is efficient and affordable urban mass transport key to the rapid economic development of India? (250 words/15m) (UPSC CSE (M) GS-1 2019)
Practice Question:  What are the potential benefits and challenges of Tesla’s proposed investment in India’s automotive sector? Discuss. (150 words/10 m)

4. Forests a national asset and major contributor to financial wealth: SC

Topic: GS2 – Indian Polity – Judiciary, GS3 –  Environment.

Crucial for UPSC due to environmental policy, legal aspects, and economic significance, reflecting on national resource management and sustainability.

Context
●  The news highlights a Supreme Court judgement asserting forests as national assets, criticising the Forest (Conservation) Amendment Act 2023, and emphasising forests’ financial and environmental importance.

 Supreme Court’s Assertion on Forests as National Asset

  • The Supreme Court, led by Justice M.M. Sundresh, emphasised in a recent judgement that forests in India are a crucial national asset and a significant contributor to the nation’s financial wealth.
  • This statement came in response to an appeal filed by the State of Telangana against a High Court decision that granted forest land to a private individual, a decision the apex court criticised as inappropriate.
  • The court imposed a ₹5 lakh cost on both the State government and the private individuals involved and directed the State to investigate its own forest officials for submitting conflicting affidavits.

Critique of the Forest (Conservation) Amendment Act (FCAA) 2023

  • The judgement coincides with widespread criticism of the Forest (Conservation) Amendment Act (FCAA) 2023, which is accused of granting states excessive power to regularise encroachments in protected forests and determine the diversion of forest lands, potentially enabling commercial exploitation of forests.
  • Justice Sundresh expressed concerns about the potential depletion and disappearance of forests, noting their vital role in preserving biodiversity and preventing massive extinction of organisms.

Financial Value of Forests

  • The court highlighted the concept of carbon credit and green accounting, emphasising the financial significance of forests to a nation.
  • Countries with excess forest cover can sell their carbon credits to those with deficits, showcasing the economic importance of forests.
  • India’s forests act as a major carbon sink, with an estimated value of $120 billion or ₹6 lakh crores, given the conservative estimate of $5 per tonne of CO2 locked in forests.

Protective Role Against Climate Change

  • The judgement emphasised the protective role of forests against climate change, citing a report from the Ministry of Environment and Forests indicating an increase in carbon stocks in India’s forests.
  • It referenced a Reserve Bank of India (RBI) report highlighting the potential macroeconomic impact of climate change and changing rainfall patterns, estimating a potential 2.8% GDP loss by 2050 and significant job losses across sectors.
  • The report also warned of the possibility of India losing 3% to 10% of its GDP annually by 2100 due to climate change, emphasising the far-reaching consequences for the nation’s future.

Conclusion

  • The Supreme Court’s judgement underscores the intrinsic value of forests as a national asset, emphasising their economic, environmental, and social significance.
  • The critique of the Forest (Conservation) Amendment Act (FCAA) 2023 highlights concerns about potential exploitation and degradation of forest resources.
  • It calls for a balanced approach to forest conservation, recognizing forests’ critical role in mitigating climate change and preserving biodiversity for future generations.
PYQ: Examine the status of forest resources of India and its resultant impact on climate change. (250 words/15m) (UPSC CSE (M) GS-1 2020)
Practice Question:  Discuss the significance of the recent Supreme Court judgement on forests as national assets, analysing its implications for environmental policy and sustainable resource management in India. (250 Words /15 marks)

 

5. India delivers first batch of BrahMos supersonic missiles to Philippines

Topic: GS2 – International Relations  GS3 –  Science and Technology

Critical for UPSC due to strategic alliances, defence diplomacy, and geopolitical implications in the Indo-Pacific region.

Context
●  India delivers BrahMos missiles to the Philippines, enhancing defence capabilities amid tensions in the South China Sea, marking a significant export deal.

 Additional information on this news:

  • India delivered the first batch of BrahMos supersonic cruise missiles to the Philippines, marking the culmination of a $375-million deal signed in January 2022.
  • The delivery, made via an Indian Air Force transport aircraft, signifies the Philippines as the first export customer for the BrahMos missile.
  • The missiles are shore-based and anti-ship variants, procured under the Horizon 2 of the Revised Armed Forces of the Philippines Modernisation Program.
  • The delivery is significant amid tensions between the Philippines and China in the South China Sea, enhancing the defensive capabilities of the Philippines’ armed forces.
  • During a visit to the Philippines in March, India reaffirmed its commitment to a rules-based international order and security in the Indo-Pacific region.
  • The BrahMos missiles, touted as the world’s fastest supersonic cruise missiles, aim to deter threats to the Philippines’ sovereignty, particularly in the West Philippine Sea.
  • The contract includes training for operators and maintainers, along with an Integrated Logistics Support package, for the coastal defence regiment of the Philippine Marines.
  • In early 2023, 21 Philippine Navy personnel underwent training in Nagpur for operating and maintaining the systems.
  • Several countries, including Indonesia and Thailand, have shown interest in acquiring BrahMos systems, with discussions at advanced stages.
  • BrahMos, a joint venture between India’s DRDO and Russia’s NPO Mashinostroyeniya, derives its name from the Brahmaputra and Moskva rivers, and it’s capable of versatile launches against surface and sea-based targets.
 More About BrahMos Missile:

● Indo-Russian Joint Venture: BrahMos missile is a result of collaboration between India’s Defense Research and Development Organization (DRDO) and Russia’s NPO Mashinostroyeniya.

● World’s Fastest Cruise Missile: It holds the title of being the fastest cruise missile globally, with a top speed of Mach 2.8, approximately three times the speed of sound.

● Range and Naming: The missile has a range of 290 km and derives its name from the Brahmaputra River in India and the Moskva River in Russia.

●   Dual-Role Capability: BrahMos missiles possess dual-role capability, meaning they can be used for both land and anti-ship attacks.

● Multi-Platform Launch: They can be launched from land, air, and sea platforms, making them versatile and adaptable to various combat scenarios.

Multi-Stage Missile: BrahMos operates on a two-stage propulsion system, with a solid propellant engine in the first stage and a liquid ramjet engine in the second stage.

● Pinpoint Accuracy: Known for its precision strike capabilities, BrahMos is capable of hitting targets with pinpoint accuracy, even in adverse weather conditions and during day or night.

● Fire and Forget Principle: The missile operates on the “Fire and Forget” principle, meaning it does not require further guidance after launch, enhancing its effectiveness in combat situations.

Strategic Importance: BrahMos missiles play a crucial role in India’s defence strategy, providing a significant deterrent against potential adversaries and bolstering the country’s national security.

● Boost to Indigenous Production: The recent contract signed by the Ministry of Defense for additional BrahMos missiles aims to enhance indigenous production capabilities, further strengthening India’s defense manufacturing sector.

PYQ: How is the S-400 air defence system technically superior to any other system presently available in the world? (150 words)? (UPSC CSE (M) GS-3 2021)
Practice Question:  Examine the significance of India’s export of BrahMos missiles to the Philippines in the context of India’s defence diplomacy and its impact on regional security dynamics. (250 Words /15 marks)

6. Fossils of huge prehistoric snake found in Kutch mine.

Topic: GS1 –  History

Critical for UPSC due to insights into ancient ecosystems, evolutionary history, and scientific research methodologies.

Context
●  Researchers at IIT Roorkee unearthed fossils of Vasuki Indicus, a massive snake species from 47 million years ago, shedding light on ancient ecosystems and snake evolution in India.

 Additional information on this news:

  • Researchers at IIT Roorkee discovered fossils of Vasuki Indicus, one of the largest snakes, in Kutch, Gujarat, dating back 47 million years to the Middle Eocene.
  • Belonging to the extinct Madtsoiidae snake family, Vasuki Indicus could have been 10 to 15 meters long, comparable to a modern school bus.
  • The discovery, reported in Nature Scientific Reports, sheds light on the evolution of Madtsoiidae in diverse climates and factors influencing large body sizes.
  • Found at the Panandhro Lignite Mine, the 27 pieces of a “partial, well-preserved” vertebral column offer insights into ancient ecosystems and snake evolution on the Indian subcontinent.
  • Vasuki Indicus existed during a period when Africa, India, and South America were a single landmass, indicating adaptations to a tropical climate with high temperatures.
  • Its robust cylindrical body suggests a powerful build, akin to Titanoboa, the longest snake known to have existed.
  • The discovery holds significance for understanding India’s ancient ecosystems and unravelling the evolutionary history of snakes on the subcontinent, according to Dr. Sunil Bajpai of IIT Roorkee.
Practice Question:  Discuss the significance of the discovery of Vasuki Indicus fossils by IIT Roorkee researchers for understanding ancient ecosystems and snake evolution in India. (150 Words /10 marks)

7. ‘Conditions not ripe for easing restrictive monetary stance’

Topic: GS3 – Indian Economy

Critical for UPSC as it covers monetary policy, inflation management, economic growth, and RBI’s decision-making processes.

Context
●  The news highlights discussions at the RBI’s Monetary Policy Committee meeting, emphasising the need to maintain price stability amid inflation risks and dissent over interest rate cuts.

 Additional information on this news:

  • RBI Deputy Governor Michael Debabrata Patra emphasised the need to restore price stability for sustaining the rising growth trajectory in the economy during the April 3-5 Monetary Policy Committee (MPC) meeting.
  • He noted that recent inflation prints and high-frequency data on food prices indicated elevated food inflation risks, with a build-up of price momentum expected as summer approached, leading to sticky food price inflation.
  • Official retail inflation data for March revealed food price inflation at 8.52%, slightly slower than February’s 8.66%, primarily due to price gains in cereals and meat.
  • Patra highlighted that while steady core disinflation and fuel price deflation provided some headroom, headline inflation was likely to remain in the upper reaches of RBI’s 2%-6% tolerance band until favourable base effects emerged in Q2 of 2024-25.
  • He stressed the importance of maintaining downward pressure on inflation until a better balance of risks emerged and uncertainties in the near term cleared.
  • Governor Shaktikanta Das underscored the need to focus on ensuring durable price stability, cautioning against the vulnerability of the inflation trajectory to supply-side shocks, particularly in food inflation.
  • External MPC member Jayanth R. Varma dissented, advocating for a 25 basis points cut in the policy repo rate, citing excessively high real interest rates imposing costs on the economy’s growth momentum.
 More about Monetary Policy Committee:

●  The Monetary Policy Committee (MPC) is a statutory body constituted by the Government of India under the Reserve Bank of India Act, 1934.

● It is responsible for determining the policy interest rate (repo rate) required to achieve the inflation target set by the government.

● The MPC consists of six members: three members appointed by the Government of India and three members from the Reserve Bank of India (RBI), including the RBI Governor who acts as the chairman.

● The primary objective of the MPC is to maintain price stability while keeping in mind the objective of growth.

● The committee meets at least four times a year to review the economic and financial developments and decide on the monetary policy stance.

●  The MPC’s decisions are made by majority vote, with each member having one vote, and the RBI Governor having a casting vote in case of a tie.

●  The MPC’s decisions on interest rates have significant implications for various sectors of the economy, including borrowing costs for businesses and consumers, inflation levels, and overall economic growth.

●  Transparency and accountability are key principles guiding the functioning of the MPC, with minutes of the meetings and decisions communicated to the public to ensure clarity and understanding of monetary policy actions.

 Restrictive Monetary Policy Vs. Expansionary Monetary Policy:

Restrictive Monetary Policy:

● Objective: Aimed at controlling inflation and stabilising prices by reducing the money supply and curbing aggregate demand.

● Interest Rate Hikes: Central banks increase benchmark interest rates to discourage borrowing and spending, making loans more expensive and reducing consumer and business expenditures.

● Tightening Credit Conditions: Commercial banks tighten lending standards, impose stricter loan requirements, and reduce credit availability to restrain economic activity.

●  Open Market Operations: Central banks sell government securities in the open market to absorb excess liquidity, withdrawing money from circulation and reducing aggregate demand.

●   Reserve Requirement Increases: Central banks raise reserve requirements for commercial banks, mandating higher cash reserves, limiting their ability to lend and expand credit.

Effects: Restrictive monetary policy may lead to lower economic growth, decreased investment, reduced consumer spending, and higher unemployment rates in the short term but helps control inflation in the long term.

Expansionary Monetary Policy:

● Objective: Designed to stimulate economic growth, increase aggregate demand, and combat recessionary pressures by expanding the money supply.

● Interest Rate Reductions: Central banks lower benchmark interest rates to encourage borrowing and spending, making loans cheaper and stimulating investment and consumption.

● Easing Credit Conditions: Commercial banks relax lending standards, offer more favourable loan terms, and increase credit availability to boost economic activity.

● Open Market Operations: Central banks purchase government securities in the open market to inject liquidity into the financial system, increasing money supply and stimulating spending.

● Reserve Requirement Reductions: Central banks lower reserve requirements for commercial banks, allowing them to lend more and expand credit, thereby promoting investment and consumption.

● Effects: Expansionary monetary policy may lead to higher economic growth, increased investment, rising consumer spending, and lower unemployment rates in the short term but may also fuel inflationary pressures over time.

PYQ:

Q.1 Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)?

1.     It decides the RBI’s benchmark interest rates.

2.     It is a 12-member body including the Governor of RBI and is reconstituted every year.

3.     It functions under the chairmanship of the Union Finance Minister.

Select the correct answer using the code given below:

(a) 1 only
(b) 1 and 2 only
(c) 3 only
(d) 2 and 3 only

Ans: Option A

(UPSC civil services prelims 2017)

 

Q.2 With reference to Indian economy, consider the following:

1.     Bank rate

2.     Open market operations

3.     Public debt

4.     Public revenue

Which of the above is/are component/ components of Monetary Policy?

(a) 1 only
(b) 2, 3 and 4
(c) 1 and 2
(d) 1, 3 and 4

Ans: Option C

(UPSC civil services prelims 2015)

 

Q.3 If the RBI decides to adopt an expansionist monetary policy, which of the following would it not do?

1.     Cut and optimise the Statutory Liquidity Ratio

2.     Increase the Marginal Standing Facility Rate

3.     Cut the Bank Rate and Repo Rate

Select the correct answer using the code given below:

(a) 1 and 2 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3

Ans: Option B

(UPSC civil services prelims 2020)

Practice Question:  Discuss the significance of the RBI’s Monetary Policy Committee deliberations on maintaining price stability amidst inflationary pressures and the implications for India’s economic growth. (250 Words /15 marks)

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