Context: 

• The sharp increase in vegetable prices, particularly tomatoes and various food products, has placed a burden on the financial budget of Indian households.

More about the news: 

•  As per a report from rating firm Crisil, the cost of a vegetarian thali rose 24.26 per cent to Rs 33.8, while that of a non-vegetarian thali increased by 12.54 per cent to Rs 67.3 in August 2023, when compared to the same period of last year.
  • This means a family of five would be incurring an additional cost of Rs 33 for preparing vegetarian thali and Rs 37.5 for non-vegetarian thali for lunch or dinner a day. 

Thali meal economics: 

• As per Crisil, the average cost of preparing a thali at home is calculated based on input prices prevailing in north, south, east and west India. 
• The monthly change reflects the impact on the common man’s expenditure. 

• The ingredients (cereals, pulses, broilers, vegetables, spices, edible oil, cooking gas) drive changes in the cost of a thali.

Impact of tomato and onion:

• Tomato, onion and potato together contribute nearly 50% to the variance in headline inflation. 
• The usual drivers of such spikes are – deficient or excess rainfall, heatwaves or strikes in mandi, speculation and hoarding. 

News Source: Indian Express

DOWNLOAD PDF

Context: 

• Sovereign Gold Bonds 2023-24 (Series II) will be opened for subscription during the period September 11-15, 2023.

Sovereign Gold Bond (SGB)Scheme:

• The SGB Scheme was launched by the Government in November 2015, under the Gold Monetization Scheme. 
• In this scheme, the issues are made open for subscription in tranches by RBI in consultation with GOI. 

Features of the scheme: 

• Minimum value: Sovereign Gold Bonds will be denominated in the multiples of a gram of gold with a minimum unit of 1 gram.
• Maximum limit: The maximum limit of gold prices which can be subscribed by an individual is 4 kg, 4 kg for a Hindu-Undivided Family and 20 kg for trusts and other similar entities. 
  • If the gold bonds are co-owned, the limit of investment will be 4kg which will be applied to the first applicant only. 
• Interest rate: The interest for the gold bonds will be 2.50% per annum which is payable semi-annually on the nominal value. 
• Tenure: The tenure of the bond will be for a period of 8 years with an exit option available in the 5th, 6th and 7th year on the dates of interest payment. 

News Source: PIB

DOWNLOAD PDF

India Charges ahead on the Global EV Map

Context: 

Research forecasts 15.4 million electric vehicles (EVs) to be shipped globally in 2023.

• Cars make up 97.1 % of the global EV market.

More on News:

• EV Growth Anticipated: Electric buses and vans are expected to see 200,000 shipments each in 2023.
  • Total EV shipments are projected to reach 18.5 million in 2024.
• Rising EV Sales in India: Sales of EVs in India have been on the rise, with significant growth recorded.
  • In 2022-23 (FY23), EV sales surged by 173.6 percent to 1.25 million, up from 460,000 in the previous year. In 2018-19, EV sales in India were at 150,000.
• Electric Two-Wheelers Dominating: Registered electric two-wheelers hold the majority of the market share, accounting for 48.8 % cumulatively until FY23.

News Source: Business Standard

DOWNLOAD PDF

Context: 

• The continuous breaking of climate records related to temperature, ocean heat, and Antarctic sea ice provides strong evidence that the climate crisis has become a reality.

Climate records broken in the summer of 2023:

• Hottest summer ever: As per the World Meteorological Organization (WMO), this summer has been the hottest on record. 
  • During the three-month span from June to August, the average temperature reached 16.77 degrees Celsius, surpassing previous records by 0.66 degrees Celsius compared to the 1990-2020 average.

• Concerns:  
  • With rising temperatures and the onset of El Nino conditions, 2023 is potentially becoming the warmest year in history.
  • Currently, it ranks as the second-hottest year on record, a mere 0.01 degree Celsius away from surpassing the previous high of 2016. 
  • This emphasizes the concerning possibility of the Earth warming by 1.5 degrees Celsius compared to pre-industrial times. 
  • With this, it could result in irreversible damage to the planet’s ecosystem, with severe repercussions for both humans and other living organisms.
• Highest sea surface temperature: The global average sea surface temperature has reached unprecedented levels. 
  • In the period from July 31 to August 31, 2023, each day surpassed the previous record set in March 2016 in terms of warmth. 
  • Concerns:  The oceans have absorbed 90% of the additional heat caused by human activity since the second half of the 19th Century. Higher ocean temperatures often cause marine heat waves (MHWs), which are extreme weather events.
    • MHWs lead to the deaths of several marine species, alter their migration patterns, cause coral bleaching and even impact weather patterns. They also can make storms like Hurricanes and Typhoons stronger.
• Lowest Antarctic sea ice extent: According to a report from NASA’s Earth Observatory, in July of 2023, the Antarctic sea ice extent reached its lowest point since satellite records began in late 1978, with an average of 13.5 million square kilometers, marking a new record low for this time of the year.

• Concerns:  The decline in sea ice coverage can result in elevated ocean temperatures, hinder ice formation, contribute to sea level rise, and disrupt ocean circulation patterns, raising alarm among researchers.

News Source: Indian Express

DOWNLOAD PDF

Context:

• The Reserve Bank of India recently decided to discontinue the Incremental Cash Reserve Ratio (I-CRR) in a phased manner. 

More about the news: 

•  Stagewise Release: Amounts impounded under the I-CRR would be released in stages so that system liquidity is not subjected to sudden shocks and money markets function in an orderly manner.

Why was I-CRR needed?

• The RBI announced I-CRR as a temporary measure to absorb excess liquidity from the banking system. It came into effect from the fortnight starting August 12.
• Reasons for Excess Liquidity: The level of surplus liquidity in the system surged because of the return of Rs 2,000 banknotes to the banking system,  RBI’s surplus transfer to the government, pick up in government spending and capital inflows. 
  • Under this, all scheduled commercial banks had to maintain an I-CRR of 10 per cent on the increase in their net demand and time liabilities (NDTL) between May 19, 2023, and July 28, 2023. 
• Excessive liquidity can pose risks to price stability and also to financial stability. Hence, efficient liquidity management requires continuous assessment of the level of surplus liquidity so that additional measures are taken as and when necessary to impound the element of excess liquidity.

News Source: The Hindu

DOWNLOAD PDF

Context:

The International Monetary Fund (IMF) and the Financial Stability Board (FSB), released a policy paper, at the request of the Indian G20 Presidency, which recommended against an outright ban on crypto-assets.

More on News:

• Earlier India’s Position: In 2018 the draft scheme of the Central Board of Direct Taxes called for banning virtual currencies , also  the RBI restrained banks from dealing in cryptocurrencies, a decision that had to be reversed by the Supreme Court in 2020.
• Suggestion from the paper: Introducing a licensing regime for crypto-asset platforms , bringing the asset under the fold of anti-money laundering and counter-terrorist financing standards.
• It marks as the new  beginning of the conversation on a global framework for regulating crypto-assets, with India acting as the main enabler.

What is Cryptocurrency?

• Cryptocurrency is a bank-independent digital currency that uses a decentralized technology 

• called blockchain to record and verify transactions in a digital ledger without any third-party interference or central authority monitoring the deal.
  • For Example: Bitcoin, Etherum, Ripple and Litecoin

Implications of crypto-assets on the Financial Ecosystem: 

• Macroeconomic stability: 
  • Monetary policy: The widespread adoption of crypto-assets could threaten the effectiveness of monetary policy as Monetary policy effectiveness would be compromised since central banks lack the ability to adjust interest rates on a foreign currency.
  • Fiscal Policy: The spread of crypto-assets can increase fiscal risks. New fiscal risks can arise from the financial sector’s exposure to the crypto-asset ecosystem, the lack of clarity of tax regimes, and the cross-border nature of crypto-assets.
• Regulatory issues: Regulatory powers and coverage Crypto-assets can pose challenges to legal, regulatory, and enforcement frameworks. 
  • For Example: In some jurisdictions, crypto-asset activities are conducted in non-compliance with applicable domestic regulations and may lead to enforcement and supervisory challenges for authorities. 
    • In some other jurisdictions, crypto-assets may fall outside of the existing regulatory perimeter, leading to regulatory gaps. 
• Legal risks: If crypto-assets are granted official currency or legal tender status, they could raise significant macro-critical legal issues as crypto assets are not recognised in countries.
  • Countries where cryptos are recognised as legal tender: Central African Republic (CAR), El Salvador 
  • Countries where cryptos are not recognised as legal tender: Algeria, Bolivia
• Financial integrity:  Due to their claimed pseudonymous nature, speed, global reach, and evidence of weak implementation of relevant anti-money laundering/counter financing of terrorism (AML/CFT) requirements, crypto-assets can be attractive to criminals, raising financial integrity risks.
  • According to the National Terrorist Financing Risk Assessment, U.S. authorities have identified several instances where terrorist groups and their financial supporters solicited funds in virtual assets. For example:
    • Terror Financing:  the Islamic State of Iraq and Syria (ISIS) has received external donations for refugee camps through virtual assets, which are converted into cash via hawaladars, where they are subsequently sent to the camps.
    • Facilitating illicit activity: Cryptocurrencies are being used to facilitate payments for various forms of illicit activity which includes the trade in drugs and other illegal goods on the dark web, ransomware such as Rhysida or Abyss Locker, kidnapping and ransom payments, and cyber-crime.
• Market integrity: Non-compliance with or lack of regulation for crypto-asset activities can impair market integrity and the interests of market participants.
• Environmental risks: Two design elements of the supporting distributed ledger network have key implications for the energy consumption of crypto-assets.
  • For Example: 
    • Nearly 38 kilotons of electronic waste are annually produced as a byproduct of Bitcoin mining.
    • Ethereum, the second-largest cryptocurrency network, was estimated to use 62.77 Terawatt-hours of electricity per year, based on energy consumption through July 9, 2022.

Way Forward:

• Safeguarding monetary sovereignty and stability: Developing effective frameworks and policies is the best way to limit substitution into crypto-assets. Robust macroeconomic policies and credible institutional frameworks are fundamental to protecting monetary sovereignty. 
• Guard against excessive capital flow volatility: Policymakers should take steps to counter the potential erosion of counter financing of terrorism(CFMs) caused by the adoption of crypto-assets.
• Address fiscal risks and adopt unambiguous tax treatment:  Fiscal risks arising from the widespread adoption of crypto-assets including those resulting from granting legal-tender or official currency status should be identified, analysed, and disclosed.
• Financial integrity regulation: Jurisdictions should implement the FATF Standards in the virtual-asset sector to protect their financial systems and the global economy from threats of money laundering, and the financing of terrorism and of proliferation of weapons of mass destruction.
• Market integrity regulation: Jurisdictions should implement and apply the IOSCO Principles and Standards to economically equivalent crypto-assets and activities.

News Source: The Indian Express

DOWNLOAD PDF

Context:

As we move into the new Parliament building and leave the old one that gave us the Constitution, there is a growing call for amending the Constitution according to the changing realities of our time.

More on News:

• The iconic old building was where 299 members of the Constituent Assembly of India toiled for over 2 years 11 months and 18 days to give us the Constitution.
• Fundamental questions are being raised by important sections like:  
  • Whether India is a nation or just a “Union of States”?
  • Should we continue to call ourselves India or change our name to Bharat?
  • Whether the word “socialist” in the Preamble is still relevant?
  • Whether the “Basic Structure” argument is still tenable?

About Constitution as a Living Document:

• Constitution: It provides the structure of rules and constraints within which political decisions are made. 
• Living Document: Almost like a living being, this document keeps responding to the situations and circumstances arising from time to time. 
• Flexibility: This concept is based on the idea that a constitution should not remain static but should be flexible enough to accommodate societal changes over time.
• • One of the most significant ways the Indian Constitution demonstrates its flexibility is through the amendment process.
• Evolution: In a democracy, practices and ideas keep evolving over time and the society engages in experiments according to these. A constitution, which protects democracy and yet allows for evolution of new practices becomes not only durable but also the object of respect from the citizens.·        
• Significant instances showcasing Constitution as a living document:
  • The 42nd Amendment Act: It is often referred to as the “Mini Constitution” because it made numerous changes to various parts of the Indian Constitution including Preamble, Directive Principles, Judicial Review, Emergency Provision, Anti-Defection Law, Election Commission etc. 

• • Basic structure and evolution of the constitution: It has emerged from judicial interpretation.
    • Judiciary advanced this theory in the famous case of Kesavananda Bharati in 1973.
  • Fundamental Rights: The interpretation of these rights has evolved over time.
    • For example, In the case of K.S. Puttaswamy v. Union of India (2017), the Supreme Court declared the right to privacy as a fundamental right.
  • Reservations: Reservation policies have been modified and expanded to include more communities.
    • For example, The Mandal Commission recommendations led to reservations for Other Backward Classes (OBCs).
• Environmental Protection: In the case of M.C. Mehta v. Union of India (1987), the Supreme Court recognized the right to a clean environment as a fundamental right.
  • Article 370 Abrogation: It granted special autonomous status to the state of Jammu and Kashmir, was abrogated through a constitutional amendment in 2019.

There have been discussions and debates about various aspects of the Indian Constitution and the need for constitutional reforms, the idea of completely replacing the existing constitution with a new one is becoming a widely debated topic.

Arguments in Favour of the Need for a New Constitution:

• Amended so many times: Given the relatively difficult method of amending the Constitution, the number of amendments appears quite high.For instance, ten amendments took place between a short span of three years between 1974 and 1976, in comparison, the Constitution of USA was amended only 27 times in 230 years. 
• Describing India as a Nation: The overall description of India in the constitution signifies the identity as a nation-state with a commitment to democracy, secularism, social justice, and unity in diversity, formally recognising India as a nation can be materialised in the new constitution.
• Socialist word in Preamble: With the LPG reforms of 1991, there has been a dilution of the Socialist ideas in the Indian political spectrum.
  • According to B.R. Ambedkar, how the Society should be organised in its social and economic side are matters which must be decided by the people themselves.
• Largest and Largely Unread: India’s Constitution has the distinction of being the largest in the world and consequently unreadable, and largely unread. It gives the government enormous powers to deliberate political and economic exploitation.
• Colonial Legacy: The Indian Constitution places the government as the master and people as its servants, an essentially colonial government trait. 
  • Like the British government before it, post-1947 Indian governments took on the role of the master and imposed limits on the economic and civic freedoms of Indians.
• Reflecting Contemporary Values and Aspirations: The world has changed significantly since 1950. A new constitution could better reflect contemporary values, social norms, and aspirations. 
  • The Constitution, while progressive in many aspects, may not fully address modern challenges such as technological advancements, climate change, environmental concerns, LGBTQ+ rights, and evolving notions of justice and equality. 

While some may argue for a new constitution for India, there are also strong arguments against it. The existing Constitution of India has endured for decades and has been amended multiple times to accommodate changing needs.

Arguments Against the Need for a New Constitution:

• Judicial Interpretation: The Indian Supreme Court has played a significant role in interpreting and expanding the scope of the existing constitution to meet contemporary challenges. A new constitution would not guarantee better judicial interpretation.
  • For example, in Navtej Singh Johar v. Union of India (2018) case, the Supreme Court decriminalized consensual homosexual activity, emphasizing that the existing constitution can evolve to protect individual rights.
• Constitutional Amendments: The Constitution of India has been amended numerous times to address various concerns, such as reservation policies, anti-defection laws, and the introduction of new fundamental rights. It provides enough flexibility to evolve according to contemporary needs.
• Preserving Basic Structure Doctrine: According to the Chief Justice of India, the basic structure of our Constitution is like the north star, which guides and gives a certain direction to the interpreters and implementers of the Constitution when the path ahead is convoluted.
• Preservation of Historical Values: The current constitution embodies the historical struggle for independence and reflects the values and ideals of the framers of the Indian Constitution; changing the constitution may risk losing this historical significance.
• Societal Acceptance and Consensus: Drafting and adopting a new constitution would require a high level of societal consensus and debate. Such consensus may be difficult to achieve in a diverse and pluralistic society like India.
• Resource and Time Considerations: These resources could be better utilized for addressing pressing issues facing the country like poverty, education, healthcare, and infrastructure development.

Way Forward:

• India or Bharat: Article 1 of the Constitution sets the tone for the entire constitutional framework starting with both ‘India’ and ‘Bharat.’ If the name of the country is changed, it would require a mere amendment to Article 1.
• Expert Committee: Form a committee of legal scholars, constitutional experts, historians, and representatives from different backgrounds to study the current constitution, and  evaluate its strengths and weaknesses.
  • For instance, the National Commission to Review the Working of the Constitution to examine how best the Constitution can respond to the changing needs and recommend changes that are required.
• Specific Areas of Concern: Identify problematic or outdated constitution provisions that need reform. 
  • For instance, revamping of criminal laws viz. IPC, CrPC, and Evidence Act.
• Strengthening Existing Provisions: Consider strengthening existing constitutional provisions to address contemporary challenges, such as environmental protection, gender equality, and technological advancements.

Conclusion:

Extreme positions may be theoretically very correct and ideologically very attractive, but logic demands that everyone is prepared to moderate their extreme views and reach a common minimum ground.

News Source: The Indian Express

DOWNLOAD PDF