PIB Summary- 2nd April, 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

PM addresses RBI@90 opening ceremony

Context

• Prime Minister Narendra Modi commemorates the Reserve Bank of India’s 90th anniversary, releasing a special coin.
• He lauds RBI’s pivotal role in India’s growth, highlighting its professionalism and contributions to financial inclusion and stability.

Additional information on this news:

• Prime Minister Narendra Modi addressed the opening ceremony of RBI@90 in Mumbai, releasing a commemorative coin to mark 90 years of the Reserve Bank of India (RBI).
• He highlighted the RBI’s pivotal role in India’s growth trajectory, spanning both pre and post-independence eras, establishing a global identity through professionalism and commitment.
• PM Modi praised the Indian banking system’s transformation into a strong and sustainable entity, attributing it to clarity of policy, intentions, and decisions.
• The government’s strategy of recognition, resolution, and recapitalization, along with reforms like the Insolvency and Bankruptcy Code, contributed to this transformation.
• The Prime Minister emphasized the tangible impact of RBI’s work on common citizens, such as financial inclusion initiatives benefiting millions, particularly women and rural sectors.
• He lauded RBI’s role in maintaining moderate inflation levels during challenging times like the COVID-19 pandemic.
• PM Modi stressed the need for RBI to continue advancing India’s growth agenda, focusing on targets for the next decade, including deepening financial inclusion and embracing digital transformation.
• He highlighted the importance of RBI’s leadership in balancing inflation control and growth, supporting India’s emergence as a global economic powerhouse.
• The Prime Minister emphasised the youth-centric policies, expansion of new sectors like green energy and defence, and the need for innovative approaches to address emerging challenges.
• Finally, PM Modi underscored the importance of RBI’s role in achieving the vision of a developed India (Viksit Bharat) by meeting the diverse banking needs, fostering economic self-reliance, and embracing technological advancements while ensuring cybersecurity.

Reserve Bank of India:

• Colonial Monetary Control: British colonial rulers needed a centralised institution to manage monetary policies and regulate banking in India. The Reserve Bank of India (RBI) was established under the Reserve Bank of India Act, 1934.
• Consolidation of Banking Authority: The RBI was established in 1935 to consolidate the functions of various colonial-era banking institutions under one central authority.
• Stabilising Currency: It aimed to stabilise the Indian rupee and establish a stable monetary framework amidst economic uncertainties during World War 2.

Significance of RBI:

• Monetary Authority: The RBI serves as the central bank of India, responsible for formulating and implementing monetary policies to maintain price stability and economic growth.
• Banker to the Government: It acts as the banker and debt manager to the Government of India, managing its finances and debt issuance.
• Regulatory Authority: The RBI regulates and supervises the banking and financial system to ensure stability, integrity, and efficiency, thereby safeguarding depositor interests.
• Currency Issuance: It has the sole authority to issue currency notes and coins in India, ensuring the stability and integrity of the country’s monetary system.

Role of RBI in India’s Growth:

• Monetary Policy: Through its monetary policy tools like repo rate, RBI influences interest rates, inflation, and credit availability, fostering economic growth.
• Financial Stability: RBI’s regulatory oversight ensures the stability of the banking sector, facilitating investment, and promoting confidence in the financial system.
• Developmental Initiatives: It initiates various developmental schemes and programs to promote financial inclusion, credit flow to priority sectors, and overall economic development.
• External Sector Management: RBI manages India’s foreign exchange reserves, facilitating trade and investment flows, and maintaining exchange rate stability.

Overall, the RBI plays a pivotal role in shaping India’s economic landscape, ensuring monetary stability, financial integrity, and sustainable growth.

Defence exports touch record Rs 21,083 crore in FY 2023-24, an increase of 32.5% over last fiscal; Private sector contributes 60%, DPSUs - 40%

Context

Defence exports in India hit a record high of Rs 21,083 crore in FY 2023-24, marking a 32.5% growth, driven by policy reforms and digital initiatives.

 Additional information on this news:

• Defence exports reached a record high of Rs 21,083 crore (approx. US$ 2.63 billion) in FY 2023-24, marking a growth of 32.5% compared to the previous fiscal.
• Over the last decade, defence exports surged by 31 times, with a remarkable increase from Rs 4,312 crore in 2004-05 to Rs 88,319 crore in 2014-15 to 2023-24.
• Both the private sector and Defence Public Sector Undertakings (DPSUs) contributed significantly, with the private sector contributing about 60% and DPSUs contributing about 40%.
• The number of export authorizations issued to defence exporters rose from 1,414 in FY 2022-23 to 1,507 in FY 2023-24.
• Policy reforms and ‘Ease of Doing Business’ initiatives by the Government, along with end-to-end digital solutions for promoting defence exports, have played a crucial role in this growth.
• The surge in defence exports reflects the global acceptance of Indian defence products and technologies.

Defence exports from India:

• Growing Defence Industry: India’s defence industry has seen significant growth, bolstered by government initiatives like “Make in India” and liberalisation of foreign direct investment (FDI) norms.
• Technological Advancements: India has developed indigenous defence technologies across various sectors, including aerospace, naval, and land systems.
• Strategic Partnerships: Strengthening strategic partnerships with countries seeking reliable defence suppliers enhances India’s export potential.
• Diversification of Products: India can leverage its expertise in manufacturing a wide range of defence equipment, from aircraft to naval vessels, to attract international buyers.

Challenges in Defence Exports

• Complex Regulatory Framework: Cumbersome export regulations and bureaucratic procedures hinder the ease of doing business in the defence sector.
• Quality Standards and Certification: Meeting stringent quality standards and obtaining necessary certifications pose challenges for Indian defence manufacturers.
• Competition from Established Players: Competition from established defence exporters like the US, Russia, and European countries presents a formidable challenge for Indian exporters.
• Limited Indigenous Capabilities: Reliance on foreign technology and components limits India’s ability to offer fully indigenous defence solutions.

Way Forward

• Streamlining Regulatory Procedures: Simplifying export regulations and bureaucratic processes will facilitate smoother defence exports.
• Investment in R&D: Continued investment in research and development (R&D) to enhance indigenous capabilities and develop cutting-edge technologies.
• Quality Assurance: Focus on improving quality assurance processes and obtaining internationally recognized certifications to build credibility in global markets.
• International Collaborations: Forge strategic partnerships and joint ventures with foreign companies to access new markets and technologies.
• Government Support: Provide financial incentives, subsidies, and export promotion schemes to incentivize defence exports.
• Diversification of Markets: Explore emerging markets in Asia, Africa, and Latin America to diversify export destinations and reduce dependency on traditional markets.
• Skill Development: Invest in skill development and training programs to build a skilled workforce capable of meeting global standards.
• Promotion of Brand India: Enhance brand India’s image as a reliable and competitive defence exporter through aggressive marketing and participation in international defence exhibitions and trade shows.