Weekly Current Affairs (15th to 21st September 2023) Part - 1 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

RBI to Discontinue I-CRR

Context: Recently, the Reserve Bank of India (RBI) announced that it would discontinue the Incremental Cash Reserve Ratio (I-CRR) in a phased manner.

• The central bank will release the amount that banks have maintained under I-CRR in stages.

How Will the RBI Implement Discontinuation of I-CRR?

• The discontinuation of the I-CRR will be implemented in stages to ensure a smooth transition and prevent sudden shocks to the system's liquidity.
• In the first and second stages of the I-CRR reversal, 25 % of each of the Banks’ impounded funds will be released. The remaining 50% of the balance will be released in the third stage.
• This measured approach aims to ensure that banks have sufficient liquidity to meet increased credit demand during the upcoming festival season.

What is I-CRR?

Background:

• On 10th August 2023, following the announcement of the monetary policy and the demonetization of Rs 2000 notes, the RBI declared that banks would be required to maintain an Incremental Cash Reserve Ratio (I-CRR) of 10% on the increase in their Net Demand and Time Liabilities (NDTL).
• NDTL is the difference between the sum of demand and time liabilities (deposits) of a bank (with the public or the other bank) and the deposits in the form of assets held by the other banks.
• Stated that it would review it in September 2023, or earlier.

Purpose of Introducing I-CRR:

• The RBI introduced the I-CRR as a temporary measure to manage excess Liquidity in the banking system.
• Several factors contributed to the Surplus Liquidity, including the demonetisation of Rs 2,000 banknotes.
• RBI's surplus transfer to the government, increased government spending, and capital inflows.
• This liquidity surge had the potential to disrupt price stability and financial stability, necessitating efficient liquidity management.

Impact of I-CRR on Liquidity Conditions:

• The I-CRR measure would absorb over Rs 1 lakh crore of excess liquidity from the banking system.
• As a result of the I-CRR mandate, the banking system's liquidity temporarily turned into a deficit on 21st August 2023, exacerbated by outflows related to Goods and Services Tax (GST) and central bank intervention to stabilize the rupee.
• However, liquidity conditions returned to Liquidity from the system.

What is the Cash Reserve Ratio (CRR)?

About:

• The percentage of cash required to be kept in reserves as against the bank's total deposits, is called CRR.
• All banks in India, except Regional Rural Banks (RRBs) and Local Area Banks (LABs), have to deposit the CRR money to RBI.
• RRBs and LABs are exempted from maintaining CRR with RBI, as per the RBI Act, 1934. However, they have to maintain CRR with themselves in the form of cash or gold or unencumbered approved securities.
• Banks can’t lend the CRR money to corporates or individual borrowers, banks can’t use that money for investment purposes, and Banks don’t earn any interest on that money.

Need to Have Reserve cash with the RBI:

• Since a part of the bank’s deposits is with the RBI, it ensures the security of the amount in case of any emergencies.
• The cash is readily available when customers want their deposits back.
• CRR helps in keeping inflation under control. If there is a threat of high inflation in the economy, RBI increases the CRR, so that banks need to keep more money in reserves, effectively reducing the amount of money that is available to the banks.
• This curbs the excess flow of money in the economy.
• When there is a need to pump funds into the market, the RBI lowers the CRR rate, which in turn, helps the banks provide loans to a large number of businesses and industries for investment purposes. Lower CRR also boosts the growth rate of the economy.
• The CRR and other monetary tools require every commercial bank to maintain but not the NBFC.

Why is RBI using I-CRR in the Case of Demonetisation?

• RBI has chosen to implement I-CRR in the case of a sudden influx of liquidity, such as during demonetization.
• RBI used I-CRR in November 2016, after the demonetization of Rs 500 and Rs 1,000 banknotes.
• It allows the RBI to address the issue without affecting other aspects of monetary policy. This precision can be crucial, especially during unique situations like demonetization.
• The I-CRR can be implemented relatively quickly. When there is a sudden surge in liquidity due to a large-scale event like the return of demonetized currency notes, the central bank may need a tool that can be put into effect promptly.
• The I-CRR is typically intended to be a temporary measure. It can be introduced when there is a need to absorb excess liquidity temporarily and can be phased out once the liquidity situation stabilizes.
• But on the other hand Other tools such as Repo Rate, Statutory Liquidity Ratio (SLR) etc may have rather long term and slower impact on liquidity.

What are the Monetary Policy Instruments Available to the RBI?

Qualitative:

• Moral Suasion: This is a non-binding technique where the RBI uses persuasion and communication to influence banks' lending and investment behavior.
• Direct Credit Controls: These are measures that involve regulating the flow of credit to specific sectors or industries. The RBI can issue directives on lending to certain sectors or set credit limits to achieve policy objectives.
• Selective Credit Controls: These are more specific than direct credit controls and target particular types of loans, such as consumer credit, to control demand in specific areas of the economy.

Quantitative:

• Cash Reserve Ratio (CRR): CRR is the proportion of a bank's deposits that it must keep as reserves with the RBI in the form of cash. By adjusting the CRR, the RBI can control the amount of funds available for lending by banks.
• Repo Rate: The repo rate is the interest rate at which the RBI lends money to commercial banks for the short term. A change in the repo rate can influence banks' borrowing costs and, subsequently, their lending rates.
• Reverse Repo Rate: The reverse repo rate is the interest rate at which banks can park their excess funds with the RBI. It provides a floor for short-term interest rates and helps manage liquidity.
• Bank Rate: The bank rate is the rate at which the RBI provides long-term funds to banks and financial institutions. It influences interest rates in the long-term money market.
• Open Market Operations (OMOs): OMOs involve the buying or selling of government securities by the RBI in the open market. This action affects the money supply and liquidity in the banking system.
• Liquidity Adjustment Facility (LAF): The LAF includes the repo rate and the reverse repo rate and is used by banks for their short-term liquidity needs. It helps the RBI manage daily liquidity conditions.
• Marginal Standing Facility (MSF): MSF is the rate at which banks can borrow overnight funds from the RBI against the collateral of government securities. It serves as a secondary source of funding for banks.
• Statutory Liquidity Ratio (SLR): SLR is the percentage of a bank's net demand and time liabilities (NDTL) that it must maintain in the form of approved securities.

NavIC Integration in Smartphones

Context: The Ministry of Electronics and Information Technology, Government of India, is planning on making it mandatory for all devices to support the homegrown Navigation System NavIC (Navigation with Indian Constellation).

• This comes at a time when the newly launched Apple iPhone 15 has integrated the navigation system developed by the Indian Space Research Organisation (ISRO) into its hardware.
• India's NavIC is not intended to replace other global navigation systems but rather complement them.

What are the Government's Plans for NavIc Integration on Smartphones?

• The Union government is considering mandating NavIC integration in all smartphones sold in India by 2025, particularly targeting 5G phones.
• Manufacturers could receive additional incentives through Production-Linked Incentive (PLI) schemes for using chips that support NavIC technology, fostering domestic chip design and production.

What are the Roadmap and Future Prospects for NavIC Adoption?

• To bolster NavIC's adoption, ISRO had launched second-generation Navigation satellites in May 2023 that will enhance interoperability with other satellite-based navigation systems and expand usage.
• The second-generation satellites will send signals in a third frequency, L1, besides the L5 and S frequency signals that the existing satellites provide.
• The L1 frequency is among the most commonly used in the Global Positioning System (GPS) and will increase the use of the regional navigation system in wearable devices and personal trackers that use low-power, single-frequency chips.
• This strategic move aligns with India's aspirations to establish technological sovereignty and emerge as a dominant space-faring nation.

What is Navigation with Indian Constellation (NavIC)?

About:

• India's NavIC is an independent navigation satellite system developed by ISRO becoming operational in 2018.
• It is providing accurate real-time positioning and timing services over
• India and a region extending approximately 1500 km around the Indian Mainland.
• It is designed with a constellation of 7 satellites and a network of ground stations operating 24×7.
• There are a total of eight satellites however only seven remain active.
• Three satellites in geostationary orbit and four satellites in geosynchronous orbit.

Recognition:

• It was recognised by the International Maritime Organization (IMO) as a part of the World-Wide Radio Navigation System (WWRNS) for operation in the Indian Ocean Region in 2020.

Potential Uses:

• Terrestrial, aerial and marine navigation;
• Disaster management;
• Vehicle tracking and fleet management (especially for mining and transportation sector);
• Integration with mobile phones;
• Precise timing (as for ATMs and power grids);
• Mapping and geodetic data capture.

What is the Significance of Integrating NavIC in Smartphones for India?

Strategic Technological Autonomy:

• NavIC reduces dependence on foreign global navigation systems like GPS (Global Positioning System), showcasing India's ability to develop and deploy critical technology independently.
• Ensures that the nation can control and secure its vital navigation infrastructure, which is crucial for national security and defense applications.

Enhanced Accuracy and Reliability:

• NavIC provides highly accurate and reliable positioning and timing information, especially in the Indian subcontinent and the surrounding region.
• Better accuracy is essential for a range of applications, from Disaster Management and agriculture to urban planning and transportation, improving overall efficiency and decision-making.

Tailored Solutions for Indian Terrain:

• NavIC is designed to offer superior performance in the specific geographical and topographical conditions of India, where conventional global navigation systems may have limitations.
• Tailoring the navigation system to suit India's diverse landscape ensures a more precise and efficient location-based service.

Broadening Use Cases and Innovation:

• NavIC's integration opens up opportunities for a plethora of location-based services, navigation apps, and other innovative solutions that can be tailored to specific local needs and preferences.
• This spurs entrepreneurship and supports a thriving app development ecosystem, encouraging creativity and innovation in technology.

What are the other Navigation Systems operational in the world?

Four Global Systems:

• GPS from the U.S.
• GLONASS from Russia.
• Galileo from European Union
• BeiDou from China.
• Two Regional Systems:
• NavIC from India
• QZSS from Japan.

Reciprocity and Non Reciprocity

Context: Scientists have developed devices which break the Principles of Reciprocity tackling the challenges that arise out of the Reciprocity Phenomenon.

What is Reciprocity?

About:

• Reciprocity means that if a signal is sent from one point to another, it is sent back from the second point to the first.
  • For Example: It's like when you shine a flashlight at a friend, they can shine it back at you because the light can go both ways through the air.
• However, there are situations where reciprocity doesn't work as expected.
• For example, in some movies, a person being questioned can't see the police officers through a window, but the officers can see them.
• Also, in the dark, one can see someone under a streetlight, but they can't see that person.
• Note: Non-reciprocity: The physics of letting waves go one way but not the other.

Applications:

• Antenna Testing: Reciprocity simplifies antenna testing. Instead of using multiple signal sources in various directions, one can send one signal into the antenna and observe how it transmits it back.
  • This helps determine the antenna's ability to receive signals from different directions, known as its far-field pattern.
• Radar Systems: Engineers use reciprocity to test and operate radar systems. By studying how radar antennas send and receive signals, they can improve the system's performance and accuracy.
  • Radar is an electromagnetic sensor used for detecting, locating, tracking, and recognizing objects of various kinds at considerable distances.
• Sonar Systems: In sonar technology, which is used for underwater detection and navigation, reciprocity aids in testing and optimizing the performance of sonar devices.
• Seismic Surveys: Reciprocity simplifies the testing and operation of seismic survey equipment used in geology and oil exploration to study subsurface structures.
• Medical Imaging (MRI): MRI scanners utilize reciprocity principles to send and receive signals for creating detailed medical images of the human body.

What are the Challenges of Reciprocity?

Spying and Information Security:

• Reciprocity means that while one can receive signals from the target, his own equipment may unintentionally transmit signals, potentially exposing his location or intentions.

Back Reflections:

• When designing high-power lasers for signal transmission, imperfections in the transmission line can lead to harmful backreflections. Reciprocity dictates that these backreflections could re-enter the laser, potentially causing damage or interference.
• In communication systems, strong back-reflections can occur due to reciprocity, leading to interference and signal degradation.
• Managing these back-reflections is essential for maintaining the quality and reliability of communication networks.

Signal Amplification for Quantum Computing:

• Quantum computers use extremely sensitive qubits that need to be maintained at very low temperatures.
• To sense their quantum states, the signals must be amplified significantly.
• However, reciprocity can introduce challenges in achieving efficient and controlled signal amplification without introducing noise or unwanted interactions.

Miniaturization:

• As technology moves toward miniaturization at nanometer and micrometer scales, ensuring signal efficiency and control becomes increasingly challenging. In self-driving cars, where monitoring various signals is crucial for safety, managing the complexities of reciprocal signal interactions presents a significant challenge.

What are the Methods Devised to Overcome Challenges Related to Reciprocity?

Magnet-Based Non-Reciprocity:

• Scientists have developed magnet-based Non-Reciprocal Devices, consisting of components like wave plates and Faraday rotators.
• The Faraday rotator, using a magnetic material, allows waves to pass in one direction but blocks them in the reverse direction, breaking the principle of reciprocity.

Modulation:

• Modulation involves continuously changing some parameter of the medium, either in time or in space.
• By altering the properties of the medium, scientists can control wave transmission and address challenges related to signal routing, communication, and interference.
• This method provides flexibility in managing signals under different conditions.

Nonlinearity:

• Nonlinearity involves making the properties of the medium depend on the strength of the incoming signal, which, in turn, depends on the signal's propagation direction.
• This approach allows scientists to control signal transmission by manipulating the nonlinear response of the medium. It offers a way to achieve non-reciprocity and control signal interactions.

Santiniketan Becomes India's 41st World Heritage Site

Context: Recently, Santiniketan, which is a town located in Birbhum district of West Bengal, was included in the UNESCO’s World Heritage List.

• The efforts to have Santiniketan recognized as a UNESCO World Heritage Site have been ongoing since 2010. Santiniketan has been recognized by UNESCO as India's 41st World Heritage Site.

Why is Santiniketan Well Known?

• Historical Significance: In 1862, Rabindranath Tagore's father, Debendranath Tagore, spotted this scenic landscape and decided to establish an ashram, building a house called Santiniketan, meaning "abode of peace".
• Name Change: The area, originally called Bhubadanga, was renamed Santiniketan by Debendranath Tagore due to its conducive environment for meditation.
• Educational Legacy: In 1901, Rabindranath Tagore chose a significant portion of land and established a school based on the Brahmachary Ashram model. This school later evolved into Visva Bharati University.
• UNESCO World Heritage Site: The Ministry of Culture proposed Santiniketan for inclusion in the UNESCO World Heritage List, emphasising its importance in human values, architecture, arts, town planning, and landscape design.
• Archaeological Preservation: The Archaeological Survey of India (ASI) has been involved in the restoration of several structures in Santiniketan, preserving its historical and cultural heritage.

Who was Rabindranath Tagore?

Early Life:

• Rabindranath Tagore was born on May 7, 1861, in Calcutta, India, into a prominent Bengali family. He was the youngest of thirteen children.
• Tagore was a polymath and excelled in various fields. He was not only a poet but also a philosopher, musician, playwright, painter, educator, and social reformer.

Nobel Laureate:

• In 1913, Rabindranath Tagore became the first Asian to be awarded the Nobel Prize in Literature for his collection of poems titled "Gitanjali" (Song Offerings).

Knighthood:

• Rabindranath Tagore was awarded with Knighthood for Services to Literature by King George V in 1915.
• Tagore renounced his title of Knighthood after the 1919 Jallianwala Bagh Massacre.

Composer of National Anthems:

• He wrote the national anthems of two countries, "Jana Gana Mana" (the Indian national anthem) and "Amar Shonar Bangla" (the Bangladesh national anthem).

Literary Works:

• His literary works include poems, short stories, novels, essays, and plays. Some of his notable works include "The Home and the World," "Gora," Gitanjali, Ghare-Baire, Gora, Manasi, Balaka, Sonar Tori, and "Kabuliwala."
• He is also remembered for his song ‘Ekla Chalo Re’.

Social Reformer:

• He was an advocate for social reform, promoting ideas of unity, harmony, and tolerance. He criticised British colonial rule and worked for Indian independence.

Tagore's Philosophy:

• His philosophy emphasised the importance of humanism, spirituality, and the connection between nature and humanity.

Literary Style:

• Tagore's writing style was marked by its lyrical and philosophical qualities, often exploring themes of love, nature, and spirituality.

Death:

• He passed away on August 7, 1941, leaving behind a rich legacy of literature and a lasting impact on Indian and world culture.

Suicidal Patterns in India

Context: Recently, World Suicide Prevention Day was observed serving a sobering reminder of the persistent problem of female suicide in India, especially among housewives.

• Despite being an often-overlooked issue, housewives consistently rank among the top categories for suicide, with alarming numbers reported in recent years.

World Suicide Prevention Day

• World Suicide Prevention Day (WSPD) is observed on 10th September every year. It was established in 2003 by the International Association for Suicide Prevention (IASP) in conjunction with the WHO.
• It focuses attention on the issue, reduces stigma and raises awareness among organizations, government, and the public, giving a singular message that suicide can be prevented.
• “Creating hope through action” is the triennial theme for the WSPD from 2021 - 2023. This theme is a reminder that there is an alternative to suicide and aims to inspire confidence and light in all of us.

What are the Challenges Faced by Housewives in India?

Recent Statistics: The National Crime Records Bureau reported that housewives accounted for 51.5% of female suicides in 2021.

• Among the major states, Kerala, Tamil Nadu, Telangana, and Karnataka featured at the top of this list.
• Housewives also account for around 15% of all suicides, highlighting the magnitude of this issue.

Challenging Circumstances:

• Limited Mobility: Many women in India face restrictions on their mobility, particularly in rural areas.
  • Societal norms and safety concerns often discourage them from traveling alone or venturing far from their homes.
  • This limited mobility can lead to feelings of isolation and helplessness.
• Restricted Financial Autonomy: Economic dependence on their spouses or families can make women vulnerable to various forms of abuse. Lack of financial independence limits their ability to make choices and escape abusive situations.
• Marital Control: Traditional gender roles and patriarchal norms in Indian society often result in women having little control over their lives, especially in the context of marriage.
  • Expectation that women should conform to the wishes of their husbands and in-laws can lead to feelings of powerlessness.
• Physical, Sexual, and Emotional Abuse: Domestic violence, including physical, sexual, and emotional abuse, is a significant problem in India. Many women endure these forms of abuse in silence due to stigma, fear of reprisal, or lack of support systems.
• Reluctance to Seek Help: Societal stigma around discussing mental health issues and seeking help for them is widespread in India. Many women hesitate to seek external assistance or confide in others about their struggles, leading to a lack of access to mental health support.

What are the Other Factors Contributing to the Problem of Suicide in India?

• Agricultural Distress and Farmer Suicides: India's agrarian economy faces numerous challenges, including erratic weather patterns, land degradation, and high input costs.
  • This has led to a significant number of farmer suicides due to debt burdens and crop failures.
  • In rural areas of India, access to lethal means like pesticides is relatively easy, and this contributes to a higher rate of impulsive suicides.
• Educational Pressure: India's competitive education system places immense pressure on students to perform well academically.
  • The fear of failure and the high expectations of parents lead to mental health issues and suicides, with students feeling they have no way out.
• Lack of Mental Health Services: Despite recent efforts to improve mental health services, there is still a shortage of mental health professionals and limited access to affordable mental healthcare, especially in rural areas.
  • It amplifies the mental health crisis in India and emerges as a paramount concern linked to the rise in suicides.
• Family Pressure on LGBTQ+ Individuals: Many LGBTQIA+ individuals in India face severe discrimination and rejection from their families, leading to feelings of isolation and depression.
  • The lack of acceptance and support within families is a significant factor contributing to suicides in this community.
• Cyberbullying: With the rise of technology and social media, cyberbullying has become a significant issue, particularly among young people. Online harassment and bullying can have severe consequences on mental health and lead to suicides.

What are the Recent Government Initiatives Related to Suicide Prevention?

• Mental Healthcare Act (MHA), 2017
• KIRAN Helpline
• Manodarpan Initiative
• National Suicide Prevention Strategy 2022

Way Forward

• Levering AI and Innovation to Empower Housewives: There is a need to introduce AI-powered skill development and job placement programs specifically designed for housewives who wish to enter or reenter the workforce.
  • AI can help identify skills and job opportunities that align with their interests and abilities.
  • These programs can provide training in various fields, such as remote work, freelancing, or part-time employment, allowing housewives to gain financial independence and a sense of purpose.
• Improve Access to Mental Health Care: There is a need to increase the availability of mental health services, especially in rural and underserved areas, by building more mental health clinics and training more mental health professionals.
  • There is a need to integrate mental health services into primary healthcare to ensure early detection and intervention for mental health disorders.
• Legislation and Regulation: There is a need to implement stricter regulations on the sale of pesticides, which are a common method of suicide in rural areas.
  • Also, enforcing laws against cyberbullying and online harassment can contribute to reduction in mental distress among young people.