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1. Banking system liquidity deficit at record high of 3.4 lakh crore

Topic: GS3 – Indian Economy- Issues relating to growth
This topic is relevant for both Prelims and Mains in the context of how the Reserve Bank of India (RBI) is addressing the liquidity deficit sheds light on monetary policy measures.
  • The banking system in India is facing a significant liquidity deficit, reaching a record high of Rs 3.4 lakh crore.
  • This development is attributed to a combination of factors, including a moderation in government spending, higher tax outflows, and slower growth in bank deposits.
  • Analysts anticipate that the Reserve Bank of India (RBI) will need to implement permanent liquidity measures to address the deficit.
Causes of Liquidity Deficit:
  • The primary reasons behind the liquidity deficit are identified as reduced government spending and the occurrence of goods and services tax (GST) outflows during the current week.
  • The government’s limited expenditure is a major contributor to this liquidity shortfall.
  • Additionally, the GST outflows further strain liquidity conditions.
Impact of Tax and GST Payments:
  • The liquidity shortage has been exacerbated by advance tax and GST payments, resulting in a deficit in the banking system.
  • The RBI has injected an average of Rs 1.8 trillion between December 16, 2023, and January 14, 2024, to address the liquidity gap caused by these payments.
Foreign Portfolio Investors (FPIs) and Liquidity Widening
  • Higher outflows from foreign portfolio investors (FPIs) have contributed to the widening of the liquidity gap in the banking system.
  • In January alone, FPIs withdrew Rs 19,308 crore from local shares, further impacting liquidity conditions.
  • This outflow adds to the challenges faced by the RBI in maintaining a stable liquidity environment.
Economic Factors Contributing to Liquidity Tightness
  • Experts points out that the liquidity tightness is a result of deposits growing at a slower pace compared to the growth in credit.
  • Data from the RBI reveals that in the fortnight ending December 29, 2023, bank deposits increased by 13% on a year-on-year basis, while credit grew by 20%.
Impact of Retail Deposits on Liquidity
  • A substantial migration of retail deposits to mutual funds has further slowed the growth of deposits, adding to the liquidity challenges faced by the banking system.
  • This shift in retail deposit behavior is identified as a contributing factor to the overall liquidity tightness.
RBI Measures and Consumer Price-Based Inflation
  • The RBI has employed Variable Rate Repo (VRR) auctions to infuse liquidity into the banking system.
  • However, analysts suggest that the central bank may need to consider more permanent measures, such as Open Market Operations (OMO) purchases, to ease the liquidity deficit.
  • The RBI’s stance is influenced by its desire to maintain a liquidity deficit, as consumer price-based inflation (CPI) remains above the target of 4%.
  • This suggests that the RBI may prioritize controlling inflation over immediate liquidity concerns.
PYQ:  If the RBI decides to adopt an expansionist monetary policy, which of the following would it not do? (2020) 1. Cut and optimize 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: (b)
Practice Question: Discuss the factors contributing to the record high liquidity deficit in the Indian banking system and analyze the potential implications on monetary policy. (150 words/10 m)

2. Turkey Overcomes Opposition: Sweden's NATO Membership Clears Key Hurdle with Strategic Implications

Topic: GS2 – International Relations- Important International institutions 
This topic is relevant for both Prelims and Mains in the context of changes in global geopolitical dynamics and alliances
  • Sweden’s bid to join the North Atlantic Treaty Organization (NATO) received a significant boost as Turkey’s parliament supported its membership, overcoming opposition that had persisted for almost two years.
  • The approval from all existing NATO members is a crucial step for any new country seeking to join the alliance, with both Turkey and Hungary being notable opponents to Sweden’s entry until now.
Sweden’s Shift from Neutrality to NATO Membership: Impacted by Russia’s Invasion of Ukraine:
  • Sweden, traditionally neutral for two centuries, altered its stance on neutrality in the wake of Russia’s invasion of Ukraine.
  • In 2022, both Sweden and Finland applied for NATO membership.
  • Once a country becomes a NATO member, an attack on its territory is considered an attack on the entire alliance led by the United States.
  • Finland’s bid was cleared, but Sweden faced resistance from Turkey’s President Recep Tayyip Erdogan and Hungary’s Prime Minister Viktor Orban.
Turkey’s Concerns and Sweden’s Reassurances: Changes in Anti-Terrorism Measures:
  • Turkey had initially accused Sweden of being lenient towards groups it considered terrorists, particularly the Kurdish militant organization, the Kurdistan Workers’ Party (PKK).
  • The relationship soured further due to Quran-burning protests in Sweden, protected under freedom of speech laws.
  • However, when Turkey’s parliament approved Sweden’s bid, it was noted that Sweden had tightened its anti-terrorism laws, curbed PKK activities, and lifted restrictions on arms sales to Turkey.
  • Sweden also pledged support for Turkey’s European Union (EU) membership bid.
Geopolitical Implications: Strategic Bases and Military Capabilities
  • Upon Sweden’s NATO membership, almost the entire Baltic Sea coastline, excluding the portion under Russia’s control, will become NATO territory.
  • This geographical shift provides the alliance with strategic bases in proximity to Russia, facilitating the defense of assets in the Baltic Sea region.
  • Despite Sweden’s numerically small military, it boasts modern and experienced forces with advanced aircraft and submarine capabilities, contributing to NATO’s overall strength and capabilities in past missions.
  • Turkey’s parliamentary support for Sweden’s NATO membership reflects a shift in diplomatic dynamics, with Sweden adjusting its policies to address Turkey’s concerns.
  • The geopolitical implications of Sweden joining NATO include strategic advantages and enhanced defense capabilities for the alliance in the Baltic Sea region.
PYQ: The expansion and strengthening of NATO and a stronger US-Europe strategic partnership works well for India. What is your opinion about this statement? Give reasons and examples to support your answer. (250 words/15m) (UPSC CSE (M) GS-2 2023)
Practice Question: Examine the geopolitical implications of Sweden’s recent approval to join NATO, considering the historical context of its longstanding neutrality. (200 words/12.5 m)

3. Punjab Challenges BSF's Extended Jurisdiction: Supreme Court to Evaluate Constitutional Validity

Topic: GS3 – Internal Security- Various Security forces & agencies and their mandate. 
GS2- Polity – Federal structure This topic is relevant for both Prelims and Mains in the context of interpretation of the Border Security Force Act and the extent of powers conferred upon the BSF.
  • In October 2021, the Ministry of Home Affairs issued a notification expanding the jurisdiction of the Border Security Force (BSF) in Punjab, West Bengal, and Assam.
  • This decision faced opposition from the Punjab government, leading to a legal challenge that is set to be heard by the Supreme Court next week.
BSF Act and Jurisdiction Expansion Rationale: Legislative Framework:
  • The BSF’s jurisdiction expansion was based on Section 139(1) of the Border Security Force Act, enacted in 1968.
  • This act empowers the BSF to arrest, search, and seize under various laws to secure India’s borders.
  • The 2021 notification increased the designated area where BSF could exercise its powers from 15 to 50 km along the borders of Assam, Punjab, and West Bengal.
  • However, this extended jurisdiction is limited to powers under specific laws, with the 15-km limit still applicable for other central legislations.
Justification for Expansion: UAVs, Smuggling, and Cattle Menace
  • Minister of State for Home Affairs Nityanand Rai highlighted that the jurisdiction expansion was a response to the heightened use of Unmanned Aerial Vehicles (UAVs) with long-range capabilities, particularly for surveillance and arms and fake currency smuggling.
  • He also emphasized the challenge of cattle smuggling, noting that smugglers often operate beyond the existing BSF jurisdiction.
Punjab’s Legal Challenge: Constitutional Grounds
  • Punjab challenged the jurisdiction expansion in the Supreme Court, citing constitutional grounds.
  • The state argued that the move would compromise its exclusive powers to legislate on police and public order matters, as provided in Entries 1 and 2 of the State List under Article 246 of the Constitution.
  • The contention included the claim that the notification was issued without consulting the concerned states.
Legal Proceedings and Arguments: Disputes Between Centre and States
  • The legal dispute began in December 2021 when Punjab filed an original suit in the Supreme Court.
  • The court, under Article 131 of the Constitution, has the ‘original jurisdiction’ for disputes between the Centre and states.
  • Additional Advocate General for Punjab argued that a substantial number of cities and towns in Punjab would fall within the 50-km jurisdiction, unlike less populated areas in states like Gujarat and Rajasthan.
Issues Before the Supreme Court: Determining Legitimacy and Interference:
  • The Supreme Court will consider whether the notification expanding BSF’s jurisdiction was arbitrary or had legitimate reasons.
  • It will evaluate whether the notification interferes with the powers of the local police and encroaches upon the states’ legislative powers.
  • Additionally, the court will decide on the factors to be considered when determining the local limits along the borders and whether uniformity should be maintained across all states.
  • The constitutional validity of challenging such notifications through an original suit under Article 131 will also be deliberated.
What is BSF?
  • The BSF was raised in 1965, after the India-Pakistan war.
  • It is one of the seven Central Armed Police Forces of the Union of India under the administrative control of the Ministry of Home Affairs (MHA).
  • Other Central Armed Police Forces are: Assam Rifles (AR), Indo-Tibetan Border Police (ITBP), Central Industrial Security Force (CISF), Central Reserve Police Force (CRPF), National Security Guards (NSG) and Sashastra Seema Bal (SSB).
  • The 2.65-lakh force is deployed along the Pakistan and Bangladesh borders.
  • It is deployed on Indo-Pakistan International Border, Indo-Bangladesh International Border, Line of Control (LoC) along with Indian Army and in Anti-Naxal Operations.
  • BSF has been defending Sir Creek in Arabian Sea and Sundarban delta in the Bay of Bengal with its state of art fleet of Water Crafts.
  • It contributes dedicated services to the UN peacekeeping Mission by sending a large contingent of its trained manpower every year.
PYQ: Analyse the multidimensional challenges posed by external state and non-state actors, to the internal security of India. Also discuss measures required to take to be taken to combat the threats. (250 words/15m) (UPSC CSE (M) GS-3 2021)
Practice Question: Critically examine the constitutional and legal dimensions surrounding Punjab’s challenge to the Ministry of Home Affairs’ notification on the extended jurisdiction of the Border Security Force (BSF). (200 words/12.5 m)


Topic: Important topics for prelims
  • A recent development in Manipur saw a gathering of significant political figures, including a Union Minister, an MP, and the majority of Meitei MLAs, at Imphal’s Kangla Fort.
  • The assembly was in response to a ‘summons’ issued by Arambai Tenggol, a Meitei radical group that has gained attention for its activities.
Arambai Tenggol: Transformation and Activities:
  • Arambai Tenggol, initially established in 2020 as a cultural outfit, underwent a rapid transformation into a radical organization.
  • Suspected to be one of the two hardline Meitei groups involved in numerous Meitei-Kuki clashes in May 2023, the organization, along with Meitei Leepun, armed itself, experiencing a surge in membership during the conflict.
  • The group is accused of targeting Naga community members and engaged in a gunfight with Assam Rifles just before Home Minister Amit Shah’s visit to Manipur in June 2023.
Meeting Objectives: Demands and Discussion:
  • The gathering at Kangla Fort was organized to discuss the demands put forth by Arambai Tenggol.
  • The demands included:
    • the delisting of Kukis from the Scheduled Tribes list,
    • deportation of refugees to camps in Mizoram,
    • border fencing,
    • replacement of Assam Rifles with another paramilitary force,
    • revocation of the Suspension of Operations (SoO) agreement between the Centre and Kuki militant groups.

5. Indian Army Launches Operation Sarvashakti in Jammu and Kashmir to Counter Resurgent Terror Threats in Rajouri-Poonch Sector

Topic: GS3 – Internal Security- Security challenges and their management in border areas  Quick facts for Prelims This topic relevant for both Prelims and Mains in the context of internal security concerns.
  • The Indian Army has initiated Operation Sarvashakti in the Rajouri-Poonch sector of Jammu and Kashmir to counter terrorists responsible for a series of attacks on troops in the region.
  • In the past few years, the area has witnessed three major attacks, resulting in the loss of 20 soldiers.
  • The operation focuses on deploying forces on both sides of the Pir Panjal range, intending to target terrorists, particularly believed to be foreigners, operating in the region.
Historical Reference: Operation Sarpvinash in 2003:
  • Operation Sarvashakti draws parallels with Operation Sarpvinash, launched in 2003 by Indian forces in the same forests south of the Pir Panjal range, specifically in the Hilkaka area in Poonch.
  • Operation Sarpvinash, one of the largest counter-insurgency operations at the time, involved around 10,000 troops under the 15 Corps and 16 Corps and aimed to flush out terrorists who had infiltrated from across the border and established camps in the dense forests.
Operation Sarpvinash Details and Significance:
  • Operation Sarpvinash, lasting approximately three months, utilized Mi-17 helicopters to airlift soldiers to Hilkaka, a Bakerwal village taken over by terrorists.
  • Lancer attack helicopters were employed to eliminate concrete bunkers constructed by the infiltrators.
  • The operation resulted in the killing of about 100 terrorists, the recovery of various weapons, explosives, and stores, and the demolition of numerous terrorist hideouts.
Strategic Importance of the Region: South of Mendhar to Pir Panjal Range
  • The region south of Mendhar leading to the Pir Panjal range through Hilkaka holds strategic importance as one of the shortest routes of access for infiltrators from across the Line of Control (LoC) into the Kashmir valley.
  • This area provides an advantageous conduit for personnel in the event of military operations and facilitates easier terrorist infiltration due to dense forests, steep mountain slopes, and effective cover.
  • Current Scenario and Significance: Persistent Security Challenges:
  • While Operation Sarpvinash brought temporary peace to the area, recent years, particularly since 2021, have seen a resurgence in high-intensity attacks on security forces in the region.
  • The persistent security challenges underscore the ongoing importance of the strategic location, prompting the initiation of Operation Sarvashakti to address renewed threats.
PYQ: Analyse the complexity and intensity of terrorism, its causes, linkages and obnoxious nexus. Also suggest measures required to be taken to eradicate the menace of terrorism. (250 words/15m) (UPSC CSE (M) GS-3 2021)
Practice Question: Critically analyze the significance of Operation Sarvashakti initiated by the Indian Army in the Rajouri-Poonch sector of Jammu and Kashmir. (200 words/12.5 m)

6. Top court gets new judge; to function with full strength.

Topic: GS2 – Indian Polity – Judiciary
Crucial for UPSC: Addresses issue of vacancies in Supreme Court judges, procedure for the appointment, impacting the judiciary’s composition and diversity.
  • The Union government has notified the appointment of Karnataka High Court Chief Justice Prasanna Bhalachandra Varale as a judge of the Supreme Court, filling the sole vacancy. He will be sworn in by Chief Justice D.Y. Chandrachud.
More information on this news:
  • Karnataka High Court Chief Justice Prasanna Bhalachandra Varale appointed as a Supreme Court judge.
  • His appointment fills the sole vacancy in the Supreme Court, arising from Justice Sanjay Kishan Kaul’s retirement on December 25, 2023.
  • Scheduled to be sworn in by Chief Justice of India D.Y. Chandrachud, Justice Varale served as Chief Justice of Karnataka High Court since October 15, 2022.
  • He is the only High Court Chief Justice from a Scheduled Caste community and the senior-most High Court judge belonging to a Scheduled Caste.
  • The collegium recommended his appointment, citing “unimpeachable conduct and integrity” with 23 years of legal practice before becoming a High Court judge.
Appointment Of Supreme Court Judges
Procedure for appointment:
  • Chief Justice Initiates: When a vacancy arises, the Chief Justice of India proposes filling it and forwards their recommendation to the Union Minister of Law, Justice and Company Affairs.
  • Collegium Consults: The Chief Justice forms their opinion in consultation with a collegium of the four seniormost puisne Judges of the Supreme Court.
  • High Court Input: They also consult with the Chief Justices of relevant High Courts, seeking their views on potential candidates.
  • Government Receives Recommendation: The Chief Justice sends their final recommendation to the government, which is not bound to accept it but does consider it seriously.
  • President Appoints: The President of India, after considering the recommendation and any consultations they deem necessary, appoints the new Supreme Court Judge.
  • Eligibility: To be eligible for appointment, a person must be a citizen of India and have been:
  1.  A Judge of a High Court for at least 5 years.
  2. An Advocate of a High Court for at least 10 years.
  3. In the opinion of the President, a distinguished jurist.

7. The urgent need for data to make personalised medicine equitable

Topic: GS2 – Social Justice – Health Critical for UPSC as it addresses global health disparities, emphasizing the need for inclusive research in genetics and medicine.
  • The article highlights the adverse effects of the blood thinner warfarin, particularly in South Africa.
  • It emphasizes the global bias in medical research, particularly genetics, and the urgent need for inclusive studies to address drug-gene interactions across diverse populations.
Warfarin and Adverse Reactions in South Africa:
  • Global Significance: Warfarin is a prominent blood thinner worldwide, vital for cardiovascular diseases.
  • Adverse Reactions in South Africa: Despite its global use, it ranks among the top four drugs causing hospitalization due to adverse reactions in South Africa.
  • Population-specific Risks: Genetic variations in different populations can lead to varying responses to drugs, making warfarin riskier for some.
Research Bias and Drug-Gene Interactions:
  • Genetic Research Bias: Most medical research, including genetics, focuses on men of Northern European origin, neglecting diverse populations.
  • Limited Benefit for Non-European Populations: Studies indicate that genetic information benefits only 18% to 24% of white individuals, showing no advantage for Black, Chinese, or Japanese populations.
  • Need for Inclusive Research: Biases in genetic research hinder the potential of precision medicine, requiring identification and study of genetic variants across diverse populations.
Genetic Variants and Drug Metabolism:
  • Role of CYP2D6 Gene: Genetic variants in CYP2D6 significantly impact drug metabolism, influencing drug efficacy and safety.
  • Understudied Populations: Over a hundred CYP2D6 variants are identified, with likely unknown impacts in understudied populations, emphasizing the need for broader research.
Global Disparities in Genetic Studies:
  • Research Diversity Gap: Genome-wide association studies predominantly involve individuals of European descent, contributing to an 86% proportion in 2021.
  • Skewed Sequencing Services: Direct-to-consumer genetic sequencing services and databases like PharmGKB exhibit significant overrepresentation of European ancestry.
  • Underrepresentation of Diversity: People of African descent, with the greatest genetic diversity, make up only 4% of the PharmGKB dataset, highlighting the underrepresentation issue.
Efforts to Address Disparities:
  • Initiatives for Diversity: Recent plans to create large databases exclusively from people with African ancestry aim to address diversity gaps.
  • Importance of Diversity: Diverse genetic studies prevent researchers from chasing red herrings and contribute to accurate disease-mutation correlations.
Call for Inclusive Research Practices:
  • Rights to Scientific Progress: The International Covenant on Economic, Social and Cultural Rights emphasizes the right of all to benefit from scientific progress, urging inclusive research practices.
  • Ramping Up Representation: Increased representation in genetic and medical studies is crucial to ensuring fair and effective treatment for all individuals.
Practice Question: Discuss the global significance of the biases in genetic research, particularly in drug-gene interactions, and its implications for precision medicine. (150 words/10 m)

8. ‘India to become main driver of incremental oil use by 2030’.

Topic: GS3 – Indian Economy – Infrastructure: Energy
India’s rising petroleum consumption, poised to surpass China, impacts global oil dynamics; crucial for understanding economic growth and energy trends in UPSC examinations.
  • India’s petroleum consumption hit a record 231 million tonnes in 2023, set to surpass China as the leading driver of global oil consumption.
  • Rapid growth, urbanization, and a focus on internal combustion engines contribute to this trend.
 More information on this news
  • India’s petroleum consumption reached a new record in the past year, with a total of 231 million tonnes in 2023, up from 219 million tonnes in 2022.
  • The country is projected to surpass China as the primary driver of incremental oil consumption before 2030.
  • Factors such as urbanization, industrialization, and the growth of the middle class are contributing to a rapid increase in the consumption of petroleum products in India. These products are used for heating, lighting, cooking, transportation, and petrochemicals.
  • Unlike China, where demand for transportation is increasingly met by electric vehicles, India’s transportation needs are still largely fulfilled by internal combustion engines due to their greater affordability.
  • While China’s oil consumption is expected to peak and start declining by the end of the decade, India’s consumption is anticipated to continue increasing throughout the 2030s.
  • India is already the second-most important driver of incremental global petroleum consumption and is likely to become the top driver before 2030.
  • The economic growth of India will play a crucial role in influencing global consumption and prices, making it a focal point for analysis and forecasts.
  • Both India and China experienced compound annual growth rates in petroleum consumption of around 3.5% between 2012 and 2022, while the rest of the world averaged only 0.5% per year during the same period.
  • As China’s deployment of electric vehicles slows further consumption growth, India’s absolute increases are expected to catch up and eventually surpass China’s later in the decade.
  • India’s share of global oil consumption rose to over 5% in 2022, up from 4% in 2021 and 3% in 2002.
Practice Question: In the context of India’s surging petroleum consumption and its global implications, discuss the factors influencing energy trends and the potential challenges for sustainable development. (150 words/10 m)

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