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Sunday, October 11, 2020

RBI’s 3rd Bi-Monthly Monetary Policy Statement 2020-21 Released

09:41

 The Monetary Policy Committee of the Reserve Bank of India  met on 7th, 8th and 9th October for its third meeting of 2020-21. Reserve Bank of India (RBI) governor Shaktikanta Das has announced crucial policy decisions at the Bank’s 3rd bi-monthly monetary policy.

On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting decided to:

  • The repo rate under the liquidity adjustment facility (LAF) has been kept unchanged at 4.00%.
  • The reverse repo rate under the LAF has been kept unchanged at 3.35%.
  • The marginal standing facility (MSF) rate and the Bank Rate have been kept unchanged at 4.25%.
  • The Reserve Bank of India (RBI) will introduce on-tap targeted long-term repo operations (TLTRO) for banks to borrow up to Rs 1 trillion from the window and invest in corporate bonds and other debt instruments of certain sectors. The on-tap TLTROs will have tenors of up to three years at a floating rate linked to the policy repo rate and the scheme will be available up to 31 March 2021. 
  • Real GDP growth is expected to be negative. The RBI’s MPC has pegged the real GDP growth for FY21 to contract by 9.5%.

About Monetary policy:

What is Monetary policy?

Monetary Policy is the central bank’s policy which uses the monetary instruments like Repo rate, Reverse repo rate, Liquidity Adjustment Facility and many others, to achieve the goals stated in the Act. In India, the Reserve Bank of India (RBI) has been given the responsibility of conducting monetary policy as mandated under the Reserve Bank of India Act, 1934.

Objectives of monetary policy?

  • The monetary policy has the prime objective of maintaining the price stability in India along with the objective of growth. Price stability is stated as a necessary precondition to achieve sustainable growth.
  • The Reserve Bank of India is also given the task of flexible inflation targeting framework along with the Government of India as per the amendment in the Reserve Bank of India (RBI) Act, 1934 which was done in May 2016. This is done once every five years.
  • Government of India has notified the 4 per cent Consumer Price Index (CPI) inflation as the target for the period from August 5, 2016, to March 31, 2021, in the Official Gazette. The target is started with the upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent.

The Monetary Policy Framework:

The amendment in the Reserve Bank of India (RBI) Act, 1934 provides the Reserve Bank of India a legislative mandate to operate the monetary policy framework of the country. This framework aims to set the policy (repo) rate after the assessment of the current and evolving macroeconomic situation, and modulation of liquidity conditions to anchor money market rates at or around the repo rate.

What is the Composition of the Monetary Policy Committee?

The Central Government has constituted the six-member monetary policy committee (MPC) in September 2016, according to Section 45ZB of the amended RBI Act, 1934.

The composition of the Monetary Policy Committee is as follows:

  1. Governor of the Reserve Bank of India – Chairperson, ex officio: Shri Shaktikanta Das
  2. Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy– Member, ex officio: Dr Michael Debabrata Patra
  3. One officer of the Reserve Bank of India to be nominated by the Central Board – Member, ex officio: Dr Mridul K. Saggar.
  4. A professor at the Mumbai-based Indira Gandhi Institute of Developmental Research: Prof. Ashima Goyal.
  5. A professor of finance at the Indian Institute of Management in Ahmedabad: Prof. Jayanth R Varma
  6. An agricultural economist and a senior adviser with the National Council of Applied Economic Research in New Delhi: Dr Shashanka Bhide.

Some important instruments of Monetary Policy:

The RBI’s Monetary Policy has several direct and indirect instruments which are used for implementing the monetary policy. Some important instruments of Monetary Policy are as follows:

  • Repo Rate: It is the (fixed) interest rate at which banks can borrow overnight liquidity from the Reserve Bank of India against the collateral of government and other approved securities under the liquidity adjustment facility (LAF).
  • Reverse Repo Rate: It is the (fixed) interest rate at which the Reserve Bank of India can absorb liquidity from banks on an overnight basis, against the collateral of eligible government securities under the LAF.
  • Liquidity Adjustment Facility (LAF): The LAF has overnight as well as term repo auctions under it. The term repo helps in the development of the inter-bank term money market. This market sets the benchmarks for pricing of loans and deposits. This helps in improving the transmission of monetary policy. As per the evolving market conditions, the Reserve Bank of India also conducts variable interest rate reverse repo auctions.
  • Marginal Standing Facility (MSF): MSF is a provision which enables the scheduled commercial banks to borrow an additional amount of overnight money from the Reserve Bank of India. Bank can do this by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a limit at a penal rate of interest. This helps the banks to sustain the unanticipated liquidity shocks faced by them.

Accommodative stance of RBI’s Monetary Policy Statement:

The MPC also decided to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward
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Employment News 10 October to 16 October 2020 Download pdf

07:53




Download Employment News pdf of this week  10 October to 16 October 2020 . Check latest job recruitment

Employment News pdf 01 December to 07 December 2018 download

Employment News pdf This Week -  10 October to 16 October 2020.

Hey Aspirants, its the latest for free of Employment Weekly Magazine. You can check latest job recruitment at various office/board. You can check upcoming vacancies and for this week/month. To download this employment magazine click on the link given below.



Click Here to download Employment News  10 October to 16 October 2020  – Download pdf 
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The HINDU Notes – 10th October 2020

07:50

 

📰 The right balance

Sudden, organic protests should not automatically invite the state’s strong arm

•Long after Shaheen Bagh became a potent symbol of democratic resistance against a discriminatory law, the Supreme Court has ventured to hold that any such indefinite blockade of a public pathway is unacceptable. And that the administration ought to take action to remove “encroachments and obstructions” placed during such protests. The Court’s assertion was made even while “appreciating the existence of the right to peaceful protest against a legislation”. On the face of it, the Court’s view arises from a straightforward balancing of two contrasting rights — the right to protest and the right to free movement. However, a moot question is whether the manner and content of a protest should always conform to forms deemed acceptable by the law. Protests, by their very nature, are not always rooted in legality, but rather derive legitimacy from the rightness of the underlying cause and the extent of public support. In many cases, they are against laws and regulations perceived as unjust. A flash strike, a spontaneous road block, a call for a complete shutdown, or a campaign to fill up jails by defying prohibitory orders — each of these is not, in a strict sense, legal; but, at the same time, it is an inevitable part of the culture of protest in a democracy. In this case, the Court rightly notes that the administration neither negotiated with the protesters in Shaheen Bagh nor tried to clear the scene.

•Any finding that a peaceful protest had continued too long, or in a place deemed inconvenient to others, should not encourage the administration to seek early curbs on the freedom of assembly. After the pandemic led to the end of the protests, there was little left for adjudication, and the Court’s remarks might come across as a gratuitous offering to administrators looking to de-legitimise protests. Following the earlier judgment that any ‘bandh’ is illegal, courts routinely stayed sector-wide strikes. Another aspect of the present ruling is the assertion that protests should be confined to “designated places”. Such judicial certitude may end up undermining the larger democratic need for public expression of dissent in a manner and place that would be most effective. While notified demonstrations are subject to regulations regarding time and space, it may not be possible to extend the same to spontaneous, organic and leaderless protests driven by a cause. The ruling should not form the basis for suppression of such protests by the force of the state. Both principles — the need for balance between the right to protest and the right to free movement, and the rule that protests should take place at designated spots — are salutary from an administrative point of view. But these cannot become unquestionable axioms to the point of rendering any and all protests that cause inconvenience to others the target of the strong arm of the state.

📰 Saving lives under the long shadow of the pandemic
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THE HINDU NEWSPAPER IMPORTANT ARTICLES 10.10.2020

07:21
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Saturday, October 10, 2020

The HINDU Notes – 09th October 2020

06:46

📰 Scissoring the DNA

The huge potential of the gene-editing tool decided the chemistry Nobel

•That scientists who pioneered the revolutionary CRISPR-Cas9 gene-editing technology, the biggest game-changer in biology in recent years, will win the Nobel Prize was never in doubt; it was only a question of when and who would get recognised for the work done to develop the tool. The Prize awarded to Emmanuelle Charpentier and Jennifer A. Doudna, just eight years after they developed the tool, has finally ended the speculation of who would win it. But most importantly, this year’s Prize for chemistry has created history by honouring an all-woman team. It all started when Dr. Charpentier discovered an RNA molecule that is part of bacteria’s ancient immune system — CRISPR-Cas — wherein clustered repeated sequences produced by bacteria can remember and destroy viruses by cleaving their DNA. Teaming with Dr. Doudna, she recreated the bacteria’s genetic scissors in a test tube and simplified the tool to make it easier to programme the system to precisely cut specific sites of interest in any DNA, including humans. While the tool is most often used to make a cut in the DNA, newer approaches are being attempted to add or make minor changes to the DNA. All these approaches may at some time in the future make it easy to “rewrite the code of life”.

•The gene-editing technology has opened up a vast window of opportunity. In the last six years, the tool has enabled scientists to edit human DNA in a dish and early-stage clinical trials are being attempted to use the tool to treat a few diseases, including inherited disorders/diseases and some types of cancer. Though in 2016 China began the first human clinical trial to treat an aggressive form of lung cancer by introducing cells that contain genes edited using CRISPR-Cas9, the use of the tool has so far been limited to curing genetic diseases in animal models. Last year, a Chinese researcher used the tool to modify a particular gene in the embryo to make babies immune to HIV infection, which led to international furore. Though no guidelines have been drawn up so far, there is a general consensus in the scientific and ethics communities that the gene-editing technique should not be used clinically on embryos. Unlike in the case of humans, the tool is being extensively used in agriculture. It is being tried out in agriculture primarily to increase plant yield, quality, disease resistance, herbicide resistance and domestication of wild species. The huge potential to edit genes using this tool has been used to create a large number of crop varieties with improved agronomic performance; it has also brought in sweeping changes to breeding technologies. The gene-editing tool has indeed taken “life sciences into a new epoch”.

📰 Keeping vigil even during unusual times

With corruption likely in pandemic management, the CAG’s audit can ensure checks and balances in the health sector

•The latest India-specific data on COVID-19 infections is alarming. With the nation spending substantial resources to manage the pandemic, what is the role of the supreme audit institution of India, the Comptroller and Auditor General (CAG) of India?

•In this context, the move, in August, where the Karnataka State Legislature’s Public Accounts Committee (PAC) directed the CAG to conduct a special audit into the purchase of COVID-19 equipment within 15 days, and where the PAC chairman H.K. Patil ‘chaired a meeting of the panel and instructed the CAG to constitute a special team of its employees to get the audit of all purchases of COVID-19 equipment’ highlights the role and significance of the national audit office in these unusual times. The panel also asked the CAG to ‘conduct an audit of expenditure incurred by the State government under the State Disaster Response Fund (SDRF). The government had used the SDRF amount for purchase of equipment in various districts’.

Opportunity for graft

•The political allegation that funds (to the tune of Rs. 2,000 crore) were siphoned off to purchase inferior quality of personal protective equipment kits, sanitisers, ventilators, masks and other equipment at prices higher than those prevailing in the market is a serious one. The opportunity to indulge in corruption exists in disaster management. Emergency procurement to save lives and reduce sufferings are a chance to obfuscate rules and procedures, and can happen in all three tiers of governance — the Union, the States and Union Territories, urban local bodies, rural local bodies and government agencies engaged in procurement at all levels. Mr. Patil has also petitioned the Karnataka State Human Rights Commission alleging the violation of rights of people during treatment.

•If all the major purchases by government entities at all levels are audited by the CAG, there can be substantial improvement in disaster management. It will usher in better transparency, integrity, honesty, effective service delivery and compliance with rules and procedures and governance.

A constitutional mandate

•The CAG has the inescapable constitutional and statutory mandate and responsibility to ensure public accountability, transparency, effective service delivery and good governance. The management of a pandemic is not an exception to this; though in the expediency of saving lives and alleviating suffering, there can be reasonable exceptions to compliance with established rules and standard operating procedures in procurement. People’s health is a priority audit theme and so is big-ticket public expenditure.

•The CAG has issued an order creating a new vertical — health, welfare and rural development on June 1, restructuring the office of the Director General of Audit, Central Expenditure. It is necessary that the CAG undertakes performance audits of COVID-19 related procurements, the Central Government Health Scheme (CGHS) and Employee State Insurance (ESI) hospitals. Audit objectives may include the procurement of equipment and drugs for CGHS wellness centres and polyclinics, laboratories and hospitals. For example, based on available reports, the CGHS provides health-care facilities to about 34.19 lakh beneficiaries, including government employees, pensioners and MPs, incurring an expense of Rs. 5,113 crore, almost half of its total expenditure on drugs from 2014-15 to 2018-19. A beneficiary survey will become part of the audit process to bring out efficacy of service delivery and the availability and quality of drugs. Auditing ESI hospitals and dispensaries is expected to provide the assured health-care services including infection control and hygiene.

•The government entities must have established and effective controls over expenses to purchase equipment. Since the lockdown, there has been substantial government expenditure. Audit recommendations can contribute improvements in various aspects of disaster preparedness, management and mitigation.

•As in the rules, all governments and government agencies must have established effective controls over disaster preparedness and management and related expenses (with proper documentation). As the CAG’s performance audits are driven by economy, efficiency and effectiveness, the audit will focus on expense tracking and achievement of outputs and outcome, in qualitative and quantitative terms. The entire process of procurement of COVID-19-related equipment and drugs, proper documentation, and compliance with rules and regulations can be streamlined with data analysis, valuable inputs and practical recommendations.

Benefits of an inspection

•There are usually red flags in disaster management, emergency procurement and related expenditures. Though COVID-19 is an unparalleled disaster, it may also provide an opportunity for scamsters to siphon off public money where normal and prudential financial regulations cannot be fully enforced and questions of inconsistencies are likely to be overlooked.

•The statutory responsibility of CAG as an independent, objective, and non-partisan constitutional authority includes appraising disaster preparedness, ensuring that management, mitigation operations, procedures are complied with, and proper internal controls are in place; ensuring that there are proper records, documentation, authentic, accurate, reliable and complete information and data; providing assurance to people’s representatives, tax payers and the public at large that government resources, including funds and assets are being used prudentially as per the law and regulations and safeguarded; providing assurance that risks are assessed, identified and minimised with established disaster management process and procedures; and, finally, offering assurance that resources are being used economically efficiently and effectively for achieving the planned objectives and that benefits have gone to the targeted beneficiaries.

•The internal audit must also ensure compliance with applicable rules and procedures even in disaster-related disbursements and procurement processes and provide valuable inputs to the external audit conducted by the CAG. Generally accepted government auditing standards require that an audit is planned and performed with sufficient, appropriate evidence to the audit findings and conclusions based on the audit objectives and scope. All public entities management must be accountable and ensure that resources are managed properly and used in compliance with laws and regulations; programmes are achieving their objectives; and services are being provided efficiently, effectively, and economically.
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