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Chhattisgarh cleared a proposal to establish a new tiger reserve, the third largest in the country, due to the recent plunge in its tiger population.

• Current Tiger Reserves in Chhattisgarh: Chhattisgarh currently, has three tiger reserves: 
  • Achanakmar Tiger Reserve in Mungeli district,
  • Indravati Tiger Reserve in Bijapur district, 
  • Udanti-Sitanadi Tiger Reserve  in Gariaband district.
• New Tiger Reserve: The Guru Ghasidas-Tamor Pingla Tiger Reserve is Chhattisgarh’s fourth tiger reserve.
  • It will integrate the Guru Ghasidas National Park and Tamor Pingla Sanctuary. 
  • It will be spread across the districts of Manendragarh-Chirmiri-Bharatpur, Koriya, Surajpur, and Balrampur.
• Reasons for establishing a new tiger reserve: According to a National Tiger Conservation Authority report released in July 2023, Chhattisgarh’s tiger population decreased from 46 in 2014 to 17 in 2022.
• National Tiger Conservation Authority Approval: The NTCA had accorded its assent to the proposal in 2021. 
  • However, the notification of the tiger reserve hanged in fire due to the presence of coal block, oil block and methane gas block in the regions falling under it.
• Benefits: The formation of the new tiger reserve is expected to boost eco-tourism and create employment opportunities for local villagers residing in the core and buffer zones. 
  • The National Project Tiger Authority will allocate additional funds for reserve operations and new livelihood projects in surrounding villages.
• Comparative Reserve Sizes: Andhra Pradesh’s Nagarjunasagar Srisailam Tiger Reserve is the largest in the country at 3,296.31 sq km, followed by Manas Tiger Reserve in Assam at 2,837.1 sq km. Both reserves have 58 tigers each.

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Tiger Reserves in Chhattisgarh

• Achanakmar Wildlife Sanctuary: The Achanakmar Wildlife Sanctuary was constituted in the year 1975 it comprises 557.55 sq kms in the north west forest block of Bilaspur forest division. 
  • Forest vegetation mainly comprises Sal, Saja, Tinsa, Bija, Bamboo. 
  • The sanctuary is close to Amarkantak which is the origin of river Narmada. 
  • Achanakmar Tiger Reserve in Chhattisgarh is a tropical moist deciduous and tropical dry deciduous forest. 
  • The reserve is also a part of the much larger Achanakmar-Amarkantak Biosphere Reserve. 
• Indravati National Park: Indravati National Park is the finest and most famous wildlife park of Chhattisgarh. 
  • It is located in Dantewada district of Chhattisgarh.
  • The Park derives its name from the Indravati River, which flows from east to west and forms the northern boundary of the reserve with the Indian state of Maharashtra. 
• Udanti-Sitanadi Tiger Reserve: It was established in 1984. It also includes Udanti and Sitanadi Wildlife Sanctuaries.
  • The reserve’s drainage system is primarily fed by the Mahanadi River and its tributaries—Udanti, Sitanadi, Indravan, and Pairi Rivers. 
  • The area features Tropical Peninsular Sal forest and Southern Tropical Dry Deciduous Mixed forest types.

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A new study by Centre for Science and Environment (CSE) has revealed that Ground-level ozone pollution is on the rise across India’s major cities.

Ozone

• About: Ozone is a variant of oxygen composed of three oxygen atoms. 
• Location: It occurs both in the Earth’s upper atmosphere and at ground level.
• Good or Bad Ozone: Ozone can be good or bad, depending on where it is found.
• Stratospheric Ozone: In the stratosphere, it forms a layer that protects us from the sun’s ultraviolet rays.

Ground Level Ozone

• Definition: Ground-level ozone is a colourless and highly irritating gas that forms near the Earth’s surface, typically within two miles above the ground.
  • It is also known as surface-level ozone or tropospheric ozone. 
  • It is a secondary, short-lived pollutant.

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• Formation Process: The formation involves Nitrogen Oxides (NOx), Volatile Organic Compounds (VOCs), and carbon monoxide from sources like vehicles, power plants, and factories.
• Reaction Mechanism: Ground-level or tropospheric ozone is created by chemical reactions between NOx gases (oxides of nitrogen produced by combustion) and volatile organic compounds (VOCs). 
  • The combination of these chemicals in the presence of sunlight form ozone.

Key Findings of the Report

• High Ozone Exceedances: All areas studied witnessed exceedances of the national ozone standard, with Delhi being the most affected. 
  • Smaller cities like Ahmedabad and Pune are experiencing a particularly rapid increase in ozone pollution.
• Night-Time Exceedances: Elevated ozone levels were observed even at night, with Mumbai recording the most instances.
  • The average duration of ozone exposure lasting 12-15 hours across most cities is concerning
• Ozone Exposure in Different Neighbourhoods
  • High-End and Green Neighbourhoods: Despite having lower levels of other pollutants, these areas are ironically more susceptible to ozone build-up.
  • Seasonal and Year-Round Issues: While summer is the peak season for ozone, the problem continues throughout the year in many areas, especially in sunnier southern cities.
• Health Impacts
  • Vulnerable Groups: High ozone levels pose serious risks to individuals with respiratory conditions, children, and older adults.
  • Health Issues: Can cause airway inflammation, exacerbate asthma, chronic bronchitis, and increase hospitalizations.

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National Air Quality Standards for Ozone

• Short-Term Exposure Standards: Given its highly toxic nature, the national ambient air quality standard for ozone is established only for short-term exposures, measured as one-hour and eight-hour averages.
• Compliance Measurement: Compliance is assessed by counting the number of days that exceed these short-term standards.
• Need for Early Action: Researchers emphasise the importance of taking early action to address ozone exposure.

Other Recommendations

• Need for Stringent Regulations: Urgent action is needed to curb NOx emissions from vehicles, industries, and other sources.
• Multi-Pollutant Approach: National Clean Air Programme’s reform agenda has to address the multi-pollutant crisis and the combined threat from PM2.5, ozone, nitrogen oxides and other gases. 
  • The programme currently focuses more on controlling PM10 or coarse dust.
• Local and Regional Actions: Ozone’s ability to travel long distances necessitates both local and regional efforts to combat this pollutant.
• Challenges and Data Gaps need to be addressed: At present, Current monitoring and data analysis methods are inadequate for tracking and mitigating ozone pollution.

Efforts to Check the Depletion of Stratospheric Ozone

• Montreal Protocol: The Montreal Protocol on Substances that Deplete the Ozone Layer is a landmark multilateral environmental agreement designed to regulate the production and consumption of nearly 100 man-made chemicals known as ozone-depleting substances (ODS) mainly chlorofluorocarbons (CFCs).
  • Adoption Date: The Protocol was adopted on 16 September 1987.
  • Universal Ratification: It is the sole UN treaty universally ratified by all 197 member states, aiming to safeguard the Earth’s ozone layer by phasing out the use of ozone-depleting substances.
  • Substances controlled by the treaty: The substances controlled by the treaty are listed in Annexes A (CFCs, halons), B (other fully halogenated CFCs, carbon tetrachloride, methyl chloroform), C (HCFCs), E (methyl bromide), and F (HFCs).
  • India as a party since 1992 has successfully implemented the Montreal Protocol for phasing out Ozone-Depleting Substances (ODS).

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• Kigali Amendment to the Protocol: Adopted in 2016, the Kigali Amendment aims to phase down the production and consumption of hydrofluorocarbons (HFCs), which are potent greenhouse gases
  • In 2016, countries agreed to include HFCs in the list of controlled substances under the Montreal Protocol and decided on a schedule for its phase-down. 
  • Before the middle of this century, current HFC use has to be curtailed by at least 85 percent. India has to achieve this target by 2047 while the developed countries have to do it by 2036. 
• Air Quality Index (AQI) in India: 
  • Definition: The Air Quality Index (AQI) is a numerical scale used to communicate the quality of the air and its potential impact on health.
  • Components: It covers eight pollutants under its ambit: PM10, PM2.5, Nitrogen Dioxide (NO2), Sulphur Dioxide (SO2), Carbon Monoxide (CO), Ozone (O3), Ammonia (NH3), and Lead (Pb), for which short term (up to 24 hours) National Ambient Air Quality Standards are established.
  • Scale: The AQI typically ranges from 0 to 500, with higher values indicating worse air quality and increased health risks.
  • Categories: There are six AQI categories, namely Good, Satisfactory, Moderately polluted, Poor, Very Poor, and Severe. 
  • Purpose: It helps individuals understand the air quality in their area and take appropriate actions to protect their health, especially those in sensitive groups

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India’s first cultures of indigenous methanotrophs ‘Methylocucumis oryzae’ from rice fields and wetlands have been isolated and described by the scientists from The MACS Agharkar Research Institute (an autonomous institute of Department Science and Technology)  

• Published In: The first novel methanotroph description from India, ‘a novel genus and species: Methylocucumis oryzae’ was published in the Indian Journal of Microbiology.
  • Earlier reports on the three strains of this methanotroph and its genome have been published in: Microbial Ecology, Antonie van Leeuwenhoek, Frontiers in Microbiology and International Microbiology.
• Found In: Methylocucumis Oryzae were found in a stone quarry in Pune, situated amidst the Vetal Tekdi or ARAI hill.
  • The team of scientists documented the abundance of methanotrophs in the water filled quarry, indicating that an active methane cycle operated in this unique habitat. 
• Methanotroph was added in transplanted rice plants in pot experiments using the local popular high yielding rice variety Indrayani.

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About Methylocucumis Oryzae

• Phylogenetically Unique: Methylocucumis oryzae remain phylogenetically unique as no strains have been reported or cultured from any other country or parts of the world.
• Appearance: The methanotroph had a characteristic oval and elongated shape, similar to that of a cucumber, and thus is also called ‘methane eating cucumbers’
• Size: It has a remarkably large size compared to other bacteria and is equal to the size of a small yeast (3-6 µm). 
• Temperature Range: it has a strict mesophilic nature and cannot grow above 37ºC while most of the other methanotrophs can tolerate or grow at 37ºC or even at 40ºC.

• Importance

  • Early growth and flowering: In pot experimental trials plant growth promotion in rice plants were seen with 31% higher yield. Early flowering (~ 17days earlier than the control plants) was seen when the rice plants were inoculated.
  • Methanotrophs have potential applications in carotenoid production due to their ability to synthesize carotenoids as part of their metabolic processes.
  • Industrial Applications: Methanotrophs can serve as a sustainable source for carotenoid production as chemical processes are economically unfeasible due to high production costs and produce harmful byproducts that pose risks to food safety
  • Abundance in Environment:  Nevertheless, there is evidence that this organism exists in nature in abundance in wetlands and rice fields and further optimization experiments can help us in developing environmental and biotechno-logical applications.
  • Oxidation of Methane: Methanotroph can restrict the net emission of Methane to the environment. These bacteria oxidize up to 20% of the produced methane in rice field habitats.

• Challenges

• • Slow Growth: Methylocucumis is a considerably slow-growing methanotroph and needs approximately 7–10 days to attain visible OD, and a maximum OD of ~ 0.4 is reached after 14 days of incubation
  • Isolation: Similar to a few other methanotrophs, it was initially very difficult to isolate Mcu in pure form 
  • Contamination: Mcu is prone to get contaminated with smaller motile rods, which probably grow on the exo-polysaccharides and metabolites released by Mcu. Due to the possibility of getting contaminated, Mcu has to be maintained under strict sterile conditions, and large-scale growth in a pure form is challenging.
  • Culturing:  Methanotrophs live in gradients of methane and oxygen in nature hence they do not grow easily on solid or liquid media. The basic requirement for culturing methanotrophs is the need for air-tight chambers desiccators or glassware that can be filled with methane and air

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The Ministry of Information and Broadcasting has proposed the Broadcasting Services (Regulation) Bill, 2024, which introduces onerous regulations on independent creators of news events on platforms like YouTube, Instagram and X.

About Broadcasting

• Broadcasting is the distribution of audio or video content to a dispersed audience via any electronic mass communications medium. 
• It is typically done using the electromagnetic spectrum, such as radio waves, in a one-to-many model.
• With evolving technology, the broadcasting sector has evolved and new mediums are used to transmit content.

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Key features of the Draft Broadcast Services Bill 2024

• Purpose of the Bill: The Broadcast Services Bill 2024, which seeks to replace the 1995 Cable Television Networks (Regulation) Act, deals with television broadcasting. 

• Expanded Scope: The Broadcast Services Bill 2024 consolidates the legal framework for the broadcasting sector and extends it to OTT content and digital news and current affairs as well. 
• Definition of Digital News broadcaster: The latest draft seeks to define “digital news broadcasters” to include “publisher of news and current affairs content” means any person who broadcasts news and current affairs programmes through an online paper, news portal, website, social media intermediary, or another similar medium as part of a systematic business, professional or commercial activity but excluding replica e-papers.
  • This definition could include users on YouTube, Instagram, X etc, who generate advertising revenue through paid subscriptions or monetise their social media accounts through affiliate activities.
• Regulation of News Programmes: The draft Bill also seeks to regulate the broadcast of news and current affairs programmes (excluding print news). Such programmes will have to comply with the prescribed programme code and advertisement code.
• Broad Definitions: The term ‘systematic activity’ has also been defined to mean any structured or organised activity that involves an element of planning, method, continuity or persistence.This is a very vague term which could be made to mean anything and gives the executive a long leash over enforceability.
• Inclusion of Individual Creators: The new draft specifically includes individual creators under the definition of digital news broadcasters, unlike the Information Technology Rules, 2021, which exclude individual users.

Legal Obligations for Independent Creators

• Intimation to the Ministry of Information and Broadcasting (MIB)
  • If a creator is categorised as a digital news broadcaster, they must ‘intimate’ the MIB about their work and existence.
  • There is no subscriber/viewer threshold specified in the 2024 draft.
  • All must comply regardless of audience size.
• Content Evaluation Committees (CECs)
  • Creators are required to establish one or more CECs at their own expense.
  • CECs must be diverse, including individuals knowledgeable about different social groups, women, child welfare, SC/STs, and minorities.
  • The names and credentials of CEC members must be submitted to the government.
• Penalties for Non-Compliance
  • Failure to appoint a CEC or to submit required details will incur fines: ₹50 lakh for the first violation and ₹2.5 crore for subsequent violations within three years.
• Exemptions and Administrative Procedures
  • The draft Bill allows for potential exemptions for certain players or groups to avoid genuine hardship.
  • Creators must submit an application to the government within a month to notify their operational status and CEC appointment.

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Obligations for Social Media Companies under the Draft Broadcast Services Bill 2024

• Exemptions from Liability
  • Function Limitation: Social media intermediaries like Facebook, YouTube, and X are not liable for third-party content if:
    • Their role is limited to providing access to a communication system for third-party information.
    • They do not initiate or alter the transmission of information.
    • They only modify information in compliance with government orders.
    • They exercise due diligence and adhere to prescribed guidelines.
• Criminal Liability Provisions
  • Information Compliance: Social media companies may face criminal liability if they fail to provide required information related to OTT broadcasters and digital news broadcasters on their platforms for compliance purposes.

Current Legal Precedents

• Court Orders on IT Rules 2021: The Bombay and Madras High Courts had stayed rule 9(1) and 9 (3) of the IT Rules 2021 that mandate news and current affairs publishers to adhere to Code of Ethics, citing its adverse impact on press freedom. 
• Potential Impact on Broadcasting Bill: These court orders may serve as a precedent if digital news broadcasters seek a stay on provisions in the Broadcasting Bill, if it were to be published in its current form.

Example of  Other Countries

• Singapore’s Broadcasting Law
  • Scope: Includes both traditional broadcasters and OTT content providers.
  • Regulation: OTT platforms are regulated under copyright law and must obtain a licence from a regulator.
    • Though the obligations for licensees are less stringent compared to traditional television services.

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A recent study reported uncovering a novel brain-derived hormone  called CCN3 which is responsible for increased bone mass in postpartum lactating mothers.

About the study

• Published In: The study is published in the journal Nature
• Hypothesis: An another way to strengthen bones, independent of oestrogen in the body was suspected for a long time,
  • During pregnancy the body suppresses oestrogen production in the ovaries leading to weaker bones in females, but it was observed that the mothers’ bones become stronger in this time to meet the high calcium demands of their babies and to make up for bone loss during pregnancy.

• The Study

• • Mice genetically modified to not produce a protein called oestrogen receptor alpha in the hypothalamus were used for the experiment.

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• • • The researchers isolated a specific skeletal stem cell population from wild-type mice and transplanted them into mutant mice. The result was higher bone mineralisation in the mutant female mice.
  • Factor Identification: The researchers put the mutant mice on a high-fat diet (lost bone mass) which will affect the function of KISS1 neurons to identify the factors driving such changes.
    • Of the two genes (Ccn3 and Penk) only the hormone produced by the Ccn3 gene, called CCN3  was found to be located in all the KISS1 neurons in the mutant mice.
  • As an Osteoanabolic Hormone: The researchers established the role of CCN3 as an osteoanabolic hormone (involved in making bone) by extracting skeletal stem cells from wild-type mice and cultured the cells with the CCN3 hormone recording  a 200% increase in mineralisation.

• Result

  • Bone Mineralisation: Researchers found that specific neurons, called KISS1 neurons, used the CCN3 hormone to maintain bone mineralisation during lactation.
    • KISS1 neurons: They are located in the arcuate nucleus (ARC), a critical part of the hypothalamus that regulates metabolism, reproduction, and bone health. KISS1 neurons are key to regulating bone mass in females.
  • Bone Repair: Low doses of mouse CCN3 significantly increased the bone mass of young and aged femurs and of adult wild-type mice. In two-year-old male mice with bone fractures, treatment with CCN3 accelerated bone repair 
  • A Sex-Specific Regulatory Mechanism: CCN3 had been explicitly upregulated in mutant female mice but not in wild-type mice or in mutant male mice suggesting a unique response by the mutant female mice highlighting a potential sex-specific regulatory mechanism of bone formation involving CCN3.
  • Bone Formation: CCN3 increased the frequency and potential with which skeletal stem cells matured into cells that form bone and cartilage. 
    • The hormone helped produce more cells that built bones and cartilage and made these cells better at doing their job, leading to stronger and healthier bones.
  • Maternal Bone Mass and CCN3 hormone: It was found that lactating mothers with low CCN3 and a low-calcium diet had lower bone density, negatively affecting the survival of their offspring.
    • In mice,the CCN3 is observed to be absent during early and late pregnancy, appears within seven days after birth, and drops again as lactation decreases. 

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• Significance

• • Therapeutic Agent: CCN3 identification  presents new opportunities to investigate its potential as a therapeutic agent for hereditary and chronic skeletal disorders, broadening the range of treatment choices for osteoporosis.
  •  CCN3 can be established as a potentially new therapeutic osteoanabolic hormone for both sexes and define a new maternal brain hormone for ensuring species survival in mammals.
  • Broader Understanding of Hypothalamus: The study revealed a pathway in which hypothalamic neurons sidestep conventional routes to directly release hormones into the bloodstream, providing fresh perspectives on the communication between the brain and the body.
  • Maintain Maternal bone mass: The study can now open new avenues to maintain bone mass in pregnant and lactating mothers.
  • Application: The results were replicated in male and female human skeletal stem cells as well, confirming its broad applicability.

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NARCL aims to take over ₹2 trillion worth of banks’ stressed or non-performing assets (NPAs) by FY26.

By FY24, NARCL had already achieved the ₹1-trillion mark in NPAs acquisition.

About Bad Bank

• A bad bank is an Asset Reconstruction Company (ARC) or Asset Management Company (AMC).
• Loan Management: It takes over bad loans from commercial banks, manages them, and recovers the money over time.
• Balance Sheet Cleanup: Helps commercial banks clean up their balance sheets and resolve bad loans.
• Operations and Financials
  • No Lending or Deposits: The bad bank does not engage in lending or taking deposits.
  • Loan Acquisition: Takes over bad loans typically below their book value.
  • Recovery Efforts: Aims to recover as much of the loan value as possible.

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National Asset Reconstruction Company Ltd (NARCL)

• NARCL acts as a bad bank in India. 
• The plan to form a bad bank was announced in the Union Budget 2021-22 for handling large loans of over ₹500 crore.
• New Structure
  • NARCL’s Role: Acquire and aggregate bad loan accounts from banks.
  • IDRCL’s Role: India Debt Resolution Co. Ltd (IDRCL) will handle the resolution process under an exclusive arrangement with NARCL.

Challenges Faced by Bad Banks

• Complex Valuation: Determining the fair value of NPAs is complicated and often disputed.
• Financial Risks: Overvaluation can cause losses, while undervaluation may result in inadequate recovery.
• Difficult Recovery: Extracting value from bad loans is challenging and lengthy.
• Capital Needs: Substantial capital is required to purchase NPAs from banks.
• Market Volatility: Fluctuations can affect asset sale and recovery efforts.
• Specialized Skills: Managing distressed assets demands expertise and specialized skills.

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Pros and Cons of a Bad bank

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The wildfires currently raging in the United States and Canada are so intense that they have created pyrocumulonimbus clouds. 

• These pyrocumulonimbus clouds have the potential to spit out thunder and spark more fires.

About Pyrocumulonimbus Clouds

Pyrocumulonimbus clouds are thunder clouds created by intense heat from the Earth’s surface. 

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• Occurrence: Not every wildfire leads to the creation of pyrocumulonimbus clouds. They occur only when there is an extremely hot wildfire or volcanic eruptions can also lead to the formation of pyrocumulonimbus clouds. 
  • Example: These clouds were formed during the Australian bushfires of 2019-2020 when temperatures crossed 800 degrees Celsius.
• Formation: The intense heat from the fire warms the surrounding air which moves upward into the atmosphere. As this hot and very buoyant air carrying water vapour, smoke, and ash rises, it expands and cools down. 
  • Pyrocumulus cloud: Once the hot air carrying water vapour, smoke, and ash is cool enough, water vapour condenses on ash, forming a grey or brown cloud. At this stage, the cloud is known as a pyrocumulus cloud, also known as ‘fire cloud’. 
  • Pyrocumulonimbus Cloud: If there is sufficient water vapour available and the upward movement of hot air intensifies, pyrocumulus clouds can evolve into a pyrocumulonimbus cloud. 
    • These clouds can reach heights of 50,000 feet and generate their own systems of thunderstorms.
• Impact: Although pyrocumulonimbus clouds can produce lighting, they do not generate much rain. As a result, they can spark new wildfires many kilometres away from the main blaze. 
  • These clouds can also trigger strong winds that can make the spread of the wildfire faster and unpredictable.

Why are Pyrocumulonimbus Cloud events occurring more often?

The development of Pyrocumulonimbus Clouds has become more frequent in recent years. 

• Rise in Occurrence: Before 2023, 102 pyrocumulonimbus were recorded globally in a single year on average — 50 of them were seen in Canada. However, during last year’s extreme wildfire season, 140 pyrocumulonimbus clouds were recorded in Canada alone.
• Impact of Climate Change: The exact reason remains unclear as unlike in the case of other extreme weather events. Scientists, however, believe that climate change could have a role to play in the increase of their frequency.
  • Studies have shown that with temperatures soaring across the world, wildfires are becoming more common and intense. This could be spiking the occurrence of pyrocumulonimbus clouds.

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Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC) has kept the repo rate unchanged at 6.5 percent for the ninth time

Why did the MPC decide to keep the policy rate unchanged?

• Food inflation: RBI has been raising concerns over elevated food inflation over the past many months, as it could derail the disinflation path. 
• Headline inflation: As measured by year-on-year (y-o-y) changes in the all-India consumer price index (CPI), edged up to 5.1% in June from 4.8% in May. 
  • The increase in the inflation rate is attributed to food inflation, which firmed up to 8.4% in June compared to 7.9% in the previous month.
  • Food component of retail inflation remains stubborn. Food inflation contributed around 70 per cent of the overall retail inflation.
    • Retail inflation, also known as Consumer Price Index (CPI) inflation, tracks the change in retail prices of goods and services which households purchase for their daily consumption

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About Monetary Policy Committee (MPC)

• Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016  to provide for a statutory and institutionalised framework for a MPC. 
• Under Section 45ZB of the amended RBI Act, 1934: The central government is empowered to constitute a six-member MPC.
  • Composition: It includes three central bank officials and three external members appointed by the government. 
    • Three central bank officials: RBI Governor Shaktikanta Das(Chairperson), Deputy Governor Michael Patra and Executive Director Rajiv Ranjan. 
    • Reconstitution & Reappointment: The MPC is reconstituted every four years  and members are not eligible for reappointment. 
• Function: The MPC is entrusted with the task of fixing the benchmark policy rate (repo rate) required to contain inflation within the specified target level. 
• Inflation Targets: If the average inflation is more than the upper tolerance level of 4% + 2%, that is, 6%, or less than the lower tolerance level of 4% – 2%, that is, 2%, for any three consecutive quarters, it would mean a failure to achieve the inflation target.
• Failure to Meet the Target: If RBI fails to meet the inflation target, it shall set out in a report to the Central Government
  • The reasons for failure to achieve the inflation target
  • Remedial actions proposed to be taken by RBI
  • An estimate of the time-period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions.
• Quorum: There shall be four Members, at least one of whom shall be the Governor and, in his absence, the Deputy Governor, who is the Member of the MPC.
• Decision Making: The MPC takes decisions based on a majority vote. 
  • In case of a tie: RBI governor will have the second or casting vote.
• Binding Decision: The decision of the MPC would be binding on the RBI.

What is Repo Rate?

• The repo rate is the interest rate at which the central bank lends money to commercial banks for a short period, typically one day. 
• Repo: The term “repo” stands for “repurchase agreement,” which means that the borrowing bank agrees to repurchase the securities it has sold to the central bank at a later date, often the next day, at a slightly higher price
• Difference is the Interest: The difference between the selling price and repurchase price represents the interest earned by the central bank on the transaction.
• Objectives of Repo Rate
  • Controlling Money Supply: By adjusting the repo rate, the central bank can influence the liquidity in the financial system. 
    • When the economy needs a stimulus, the central bank may reduce the repo rate, making borrowing cheaper for commercial banks. This, in turn, encourages banks to borrow more funds, leading to increased lending and spending in the economy.
  • Managing Inflation: One of the primary objectives of a central bank is to maintain price stability and control inflation. 
    • By tweaking the repo rate, the central bank can influence the borrowing and spending behavior of businesses and consumers. 
    • A higher repo rate makes borrowing expensive, leading to reduced spending, which can help combat inflationary pressures. Conversely, a lower repo rate encourages borrowing and spending, boosting economic activity.
  • Ensuring Financial Stability: The repo rate also plays a vital role in maintaining the stability of financial markets. 
    • During times of financial stress or liquidity crunch, the central bank can reduce the repo rate to provide liquidity to banks, helping them meet their short-term funding requirements.
• Impact on the Economy
  • Interest Rates: The repo rate directly influences the interest rates in the economy. 
    • A change in the repo rate leads to a corresponding change in lending and deposit rates offered by commercial banks. 
    • Lower repo rates lead to reduced borrowing costs, stimulating investments and consumption, while higher repo rates tend to discourage borrowing and slow down economic activity.
  • Investment and Consumption: Lower repo rates encourage businesses to borrow at cheaper rates for investments, leading to increased economic activity. 
    • Similarly, individuals may find it more attractive to borrow for big-ticket purchases like homes and automobiles, thereby boosting consumption.
  • Exchange Rates: Changes in the repo rate can influence exchange rates. 
    • Lower rates may lead to a depreciation of the domestic currency as investors seek higher returns in other currencies. 
    • Conversely, higher rates can attract foreign capital, leading to an appreciation of the domestic currency.

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RBI Monetary Policy – Meeting Outcome

• Repo rate unchanged: Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC) has kept the repo rate unchanged at 6.5 per cent for the ninth time amid risks from higher food inflation.
  • Consequently, the standing deposit facility (SDF) rate remains at 6.25 per cent, while the marginal standing facility (MSF) rate and the bank rate remain at 6.75 per cent
• Inflation Forecast: The MPC left its inflation forecast for this fiscal year (FY25) unchanged at 4.5 per cent, even amid caution on food price trajectory that may hurt core inflation and intensifying geopolitical tensions which poses threat to any comfort on crude prices easing to multi-month lows.
• GDP growth Forecast: The MPC continues to expect Indian economy to grow at 7.2 per cent in FY25, even as it moderated outlook for the first quarter
• RBI MPC on domestic growth: Domestic growth has ‘held up well’ due to steady urban consumption and ‘improving’ rural consumption. 
  • Based on this the MPC has decided for the monetary policy to ‘stay the course’ and keep a vigil on the inflation trajectory.
• Withdrawal of accommodation : The RBI MPC has also decided to keep its stance of ‘withdrawal of accommodation’ unchanged with a majority of 4-2.
  • Withdrawal of accommodation means reducing the money supply in the system which will rein in inflation. 
  • This was to ensure that inflation aligned with the four per cent target while supporting growth.
• RBI’s CPI projection: Core inflation has been moderated to a ‘historic low’ in May and June, with food inflation contributing to 75 percent of inflation in these two months. 
  • Food inflation makes up 46 percent of weight in the Consumer Price Index (CPI) basket. 

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The RBI’s intention in keeping rates unchanged is to ensure a stable interest rate environment and price stability in order to achieve sustained growth. While central banks in countries like Canada, Europe, and England have opted for rate cuts, the US Federal Reserve has chosen to keep its policy rate unchanged in its latest meeting.

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This year’s budget gave pride of place to the long-term goal of Viksit Bharat 2047 and mentioned that reforms in many areas would be needed to achieve it, particularly in trade policy.

• With the flagship program of “Make in India” and a vision of becoming a $ 5 trillion economy by FY 2025-26, this Union Budget seems to be a cornerstone in translating this vision into actionable policies and investments.

About Viksit Bharat 2047

The term ‘Viksit Bharat’ means ‘Developed India’. Viksit Bharat 2047 is the vision to transform India into a developed nation by 2047. 

• Vision: It encompasses various facets of development, such as economic growth, environmental sustainability, social progress, and good governance, to make India a developed nation by 2047.
• Pillars: The four pillars of Viksit Bharat are Yuva (Youth), Garib (Poor), Mahilayen (Women) and Annadata (Farmers). 
• Targets for Developed India:
  • Gross Domestic Product (GDP): The proposed measures should boost India’s GDP to $6.69 trillion in 2030, $16.13 trillion by 2040, and $29.02 trillion by 2047. 
  • Per Capita Income: The projections for per capita income at current prices are $4,418 by 2030, $10,021 by 2040, and $17,590 by 2047. 
    • It means the present per capita income of about Rs 2 lakhs will become about Rs 14.9 Lakhs by 2047. 
  • Exports: Export targets are $1.58 trillion by value in 2030, $4.56 trillion by 2040, and $8.67 trillion by 2047.
• Different aspects of Viksit Bharat should look like in 2047:
  • Economic Growth: A Viksit Bharat should have a resilient and strong economy that can provide opportunities and a high standard of living for all its citizens. 
  • Environmental Sustainability: A Viksit Bharat should have a clean and green environment to preserve India’s biodiversity and natural resources. 
  • Social Progress: A Viksit Bharat should have an inclusive and harmonious society that ensures the dignity and well-being of all its citizens. 
  • Good Governance: A Viksit Bharat should have an agile governance with sound policies and accountability. 

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About Trade Policy

Trade policy refers to a nation’s formal set of practices, laws, regulations, and agreements that govern international trade practices, or imports and exports to foreign countries. 

• Refers: The management of international exchanges of goods and services between national and regional economies. It involves regulating imports and managing exports, including export promotion and export controls.
• Aim: Trade policies aim to strengthen the domestic economy. 
  • Policies should be tailored to specific targets and in this respect an ambitious target for exports of goods and services must rise from $775 billion in 2023-24 to $2 trillion by 2030 has been set. 
  • This implies a growth rate of over 14 % in nominal US dollars. This is three times faster than the International Monetary Fund (IMF) projection of global exports of goods and services in the same period.
• Role of Government: Trade policy is a government’s stance on international trade, or a combination of laws and practices that affects imports and exports.
  • Trade policies can include regulations, tariffs, and quotas.
  • Some nations want to encourage more trade and pursue open trade policies with certain other nations, while others want to restrict trade and set policies that protect local industries from competition.
  • Trade policies can have a number of benefits, including economic growth or lower costs of goods.

Significance of Trade Policy

Trade policy is only one of the factors that can deliver strong export performance. Other initiatives, such as developing good infrastructure, reducing logistical costs, development of human skills and improving the ease of doing business, are also important. These factors are relevant not just for exports, but for the economy as a whole.

• Appropriate Distribution of Labour: With the  trade policy, India can generate a sphere of expertise and specialisation over a worldwide platform. 
  • Trade policy of India can support in making merchandises at a lower cost. 
  • India has massive natural resources, it has plenty of labour, can import some raw material and export finished goods to countries. Thus, this lessens the overall cost of production.
• Stable Pricing: With the assistance of Foreign trade policy, India can lead to parity of pricing to guarantee a steady demand and supply scenario. 
  • A foreign trade policy of India also allows India to import some products at the period of a natural calamity when demand is huge. It means the shortage is handled without taxing the consumer.
• Consumer Advantage: There is a consumer advantage by availing better quality and quantity of goods. 
  • It also aids in elevating the standard of living particularly for underdeveloped areas.

Challenges that need to be Tackled

India won its political freedom in 1947 as a first step in its journey of decolonisation onto poorna swaraj. Now, it must seize its intellectual freedom. Following are the various challenges that India needs to be tackled to achieve the target and dream of Viksit Bharat 2047:

• Bilateral Investment Treaties (BITs): 
  • India recently cancelled all existing BITs unilaterally, and proposed that partners accept India’s new model BIT. 
  • Under the new model, aggrieved investors cannot invoke international arbitration to resolve disputes with the host state without first exhausting all other possibilities under domestic law. 
  • This model is contentious due to It India’s slow legal system. 
• Narrow Base for Free Trade Agreements (FTAs): India has signed an FTA with the UAE and European Free Trade Association, but this is a very small group of countries. 
  • India has signed a limited “early harvest FTA” with Australia, but its coverage is limited. 
  • India is negotiating FTAs with the UK and EU. Both are important, but progress will depend on India’s taking a more flexible line on harmonising other standards.
• Redressal Procedure: Investors in development of critical industries and in technologically sensitive areas may hesitate due to lack of speedy redress avenues along the lines that other countries offer.
• Inter-ministerial Consent: It is possible that commerce ministry negotiators find it difficult to get other ministries to agree on the flexibilities needed. 
  • Perhaps these issues should be referred to the Niti Aayog to take an overall view and seek clearance at the highest level.

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• Others: 
  • EU’s Carbon Border Adjustment Mechanism (CBAM): EU’s CBAM poses problems for India, as it may impact exports like steel and cement.
    • CBAM will initially affect a few sectors but may expand to other sectors in the future, such as refined petroleum products, pharma medicaments, etc which are among the top 20 goods imported from India by the EU.
    • Since India has no domestic carbon pricing scheme in place, it poses a greater risk to export competitiveness. India may have to deal with it separately outside FTA.
  • FTAs Signing with the US: The US is India’s most important trading partner, but it has indicated that it does not propose to sign any more FTAs. 
    • However, India should perhaps review its position of not joining the trade pillar of the US-sponsored Indo-Pacific Economic Framework. This does not offer any market access, as of now, but there is no harm in joining it.

Way Forward For India’s Trade Policy for Viksit Bharat

In the last decade, India has witnessed a paradigm shift in its approach towards trade policies, driven by a combination of regulatory reforms, technological advancements, and increased emphasis on quality and safety standards. 

• Shift in Focus: The trade policy India needs to achieve this target requires resolving some internal differences and also evolving a new approach to handle the global environment.

• • As part of the change, trade policy seems to have shifted its focus from foreign exchange earnings to investment lead impetus to value add manufacturing in India.
  • Example: India took a few initiatives in this direction such as reducing import duties on several items in this year’s budget to become more competitive for domestic production and announcing a comprehensive internal review for India’s tariff structure.
• Focus on External Developments that affect Trade Policy: In addition to restructuring customs duties, the trade policy must deal with two new developments in global trade- FTAs and the Global Value Chains (GVCs).
  • These developments imply that if India wants exports to benefit from GVCs, it need:
    • To attract the multinational companies that dominate them to locate part of their production facilities in India.
    • To join FTAs that ensure seamless duty-free access for parts and components which are essential for GVCs to work. 
• Geopolitical Developments: Rethought on Free Trade Agreements (FTAs) has acquired urgency because of geopolitical developments. There is growing tension between the West and a China-Russia partnership. 
  • Also, the IMF has stated categorically that global growth and world trade will be hurt, including India. 
  • India has a discriminatory trade policy aimed at ‘re-shoring,’ ‘near-shoring’ or ‘friend shoring.’ The discriminatory trade measures against China and Russia will have a negative impact on all sides. 
  • However, the attempt to shift trade away from China also offers India an opportunity. MNCs with GVCs may want to evolve a ‘China plus one policy,’ and India is particularly well placed to benefit from this.
• Membership on Trade Pacts: It is also important which allows the smooth movement of components across borders. 
  • Regional Comprehensive Economic Partnership (RCEP): It is the world’s largest regional trading arrangement, covering all of East Asia, including China. India was on the verge of joining it in November 2016, but backed out at the last minute. 
    • This was reportedly because Indian industry groups were nervous about giving duty-free trade access to China.
  • If China was the only reason for walking out of the RCEP, India should seriously consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). 
    • CPTPP currently covers 11 countries including Japan, South Korea, Australia and some from ASEAN. China has applied to join the CPTPP, but has not so far been accepted. The geopolitics that is keeping China out is likely to work in our favour if India applies. 
  • Time to Rethink on Approach: The real problem is that joining will require acceptance of high environmental and labour standards which India has traditionally opposed on the grounds that it restricts our ‘policy space.’ This approach needs a rethink.
• Time for Gandhian Approach: Local systems solutions, cooperatively developed by communities in their own villages and towns, are the way to solve global systemic problems of climate change and inequitable economic growth.
  • Rural India can be a university for India’s policymakers to produce innovations in policies for sustainable and inclusive progress while taking appropriate advantage of new technologies. This will make India a leader on a new course for progress that India and the world urgently need.

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