Current Affairs 01 October 2022

CONTENTS

1. RBI hiked rates by 50 bps
2. Armed Forces (Special Powers) Act
3. 5G services
4. Chief of Defence Staff (CDS)
5. Small Savings Schemes

RBI Hiked Rates By 50 Bps

Context:

The Reserve Bank of India’s Monetary Policy Committee (MPC) raised the policy repo rate by 50 basis points (bps) to 5.9%.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

1. What is the repo rate?
2. Why is the repo rate such a crucial monetary tool?
3. How does the repo rate work?
4. What impact can a repo rate change have on inflation?

What is the repo rate?

• The repo rate is one of several direct and indirect instruments that are used by the RBI for implementing monetary policy.
• Specifically, the RBI defines the repo rate as the fixed interest rate at which it provides overnight liquidity to banks against the collateral of government and other approved securities under the liquidity adjustment facility (LAF).
• In other words, when banks have short-term requirements for funds, they can place government securities that they hold with the central bank and borrow money against these securities at the repo rate.
• Since this is the rate of interest that the RBI charges commercial banks such as State Bank of India and ICICI Bank when it lends them money, it serves as a key benchmark for the lenders to in turn price the loans they offer to their borrowers.

Why is the repo rate such a crucial monetary tool?

• According to Investopedia, when government central banks repurchase securities from commercial lenders, they do so at a discounted rate that is known as the repo rate.
• The repo rate system allows central banks to control the money supply within economies by increasing or decreasing the availability of funds.

How does the repo rate work?

• Besides the direct loan pricing relationship, the repo rate also functions as a monetary tool by helping to regulate the availability of liquidity or funds in the banking system.
• For instance,
  • When the repo rate is decreased,
    • Banks may find an incentive to sell securities back to the government in return for cash. This increases the money supply available to the general economy.
  • When the repo rate is increased,
    • Lenders would end up thinking twice before borrowing from the central bank at the repo window thus, reducing the availability of money supply in the economy.
• Since inflation is, in large measure, caused by more money chasing the same quantity of goods and services available in an economy, central banks tend to target regulation of money supply as a means to slow inflation.

What impact can a repo rate change have on inflation?

• Inflation can broadly be: mainly demand driven price gains, or a result of supply side factors that in turn push up the costs of inputs used by producers of goods and providers of services, thus spurring inflation, or most often caused by a combination of both demand and supply side pressures.
• Changes to the repo rate to influence interest rates and the availability of money supply primarily work only on the demand side by making credit more expensive and savings more attractive and therefore dissuading consumption.
• However, they do little to address the supply side factors, be it the high price of commodities such as crude oil or metals or imported food items such as edible oils.

-Source: The Hindu

Armed Forces (Special Powers) Act

Context:

The Ministry of Home Affairs (MHA) has extended the Armed Forces (Special Powers) Act (AFSPA) in parts of Arunachal Pradesh and Nagaland for another six months.

Relevance:

GS III- Government Policies and Interventions

Dimensions of the Article:

1. Armed Forces Special Powers Act (AFSPA)
2. AFSPA Acts in force
3. Powers Given to an officer of the Armed Forces in a “disturbed” area under AFSPA
4. After being in force for many years, why has AFSPA been withdrawn now?
5. Why was AFSPA imposed on the Northeast in the first place?
6. Arguments Against AFSPA
7. Arguments in Favour of AFSPA
8. Important Criticisms of AFSPA and commissions regarding AFSPA
9. Supreme Court judgment on AFSPA

Armed Forces Special Powers Act (AFSPA)

• Armed Forces Special Powers Act (AFSPA), 1958 is an act of the Parliament of India that grant special powers to the Indian Armed Forces the power to maintain public order in “disturbed areas”.
• AFSPA is invoked when a case of militancy or insurgency takes place and the territorial integrity of India is at risk.
• Security forces can “arrest a person without warrant”, who has committed or even “about to commit a cognizable offence” even based on “reasonable suspicion”.
• It also provides security forces with legal immunity for their actions in disturbed areas.
• While the armed forces and the government justify its need in order to combat militancy and insurgency, critics have pointed out cases of possible human rights violations linked to the act.
• According to The Disturbed Areas (Special Courts) Act, 1976 once declared ‘disturbed’, the area has to maintain status quo for a minimum of 3 months.
• The Acts have received criticism from several sections for alleged concerns about human rights violations in the regions of its enforcement alleged to have happened.

AFSPA Acts in force

It is effective in the whole of Jammu and Kashmir, Nagaland, Assam, Manipur (excluding seven assembly constituencies of Imphal) and parts of Arunachal Pradesh.

History of AFSPA Acts

• An AFSPA Act passed in 1958 was applicable to the Naga Hills, then part of Assam.
• In the following decades it spread, one by one, to the other Seven Sister States in India’s northeast (at present, it is in force in the States of Assam, Nagaland, Manipur, Changlang, Longding and Tirap districts of Arunachal Pradesh, and areas falling within the jurisdiction of the eight police stations of districts in Arunachal Pradesh bordering the State of Assam).
• Another one passed in 1983 and applicable to Punjab and Chandigarh was withdrawn in 1997, roughly 14 years after it came to force.
• An Act passed in 1990 was applied to Jammu and Kashmir and has been in force since.

Powers Given to an officer of the Armed Forces in a “disturbed” area under AFSPA

• After giving such due warning, Fire upon or use other kinds of force even if it causes death, against the person who is acting against law or order in the disturbed area for the maintenance of public order,
• Destroy any arms dump, hide-outs, prepared or fortified position or shelter or training camp from which armed attacks are made by the armed volunteers or armed gangs or absconders wanted for any offence.
• To arrest without a warrant anyone who has committed cognizable offences or is reasonably suspected of having done so and may use force if needed for the arrest.
• To enter and search any premise in order to make such arrests, or to recover any person wrongfully restrained or any arms, ammunition or explosive substances and seize it.
• Stop and search any vehicle or vessel reasonably suspected to be carrying such person or weapons.
• Any person arrested and taken into custody under this Act shall be made present over to the officer in charge of the nearest police station with least possible delay, together with a report of the circumstances occasioning the arrest.
• Army officers have legal immunity for their actions. There can be no prosecution, suit or any other legal proceeding against anyone acting under that law. Nor is the government’s judgment on why an area is found to be disturbed subject to judicial review.
• Protection of persons acting in good faith under this Act from prosecution, suit or other legal proceedings, except with the sanction of the Central Government, in exercise of the powers conferred by this Act.

After being in force for many years, why has AFSPA been withdrawn now?

• The decision has come as the result of a combination of circumstances.
• Over the last two decades, various parts of the Northeast have seen a reduction in insurgencies, some of them up to 60 years old. A number of major groups were already in talks with the Indian government, and these talks received traction during the current regime.
• In Nagaland, all major groups — the NSCN(I-M) and Naga National Political Groups (NNPGs) — are at advanced stages of concluding agreements with the government.
• In Manipur, insurgency as well as heavy militarisation have been on the decline since 2012, when the Supreme Court started hearing a PIL on extra-judicial killings.
• In Nagaland, the killing of 14 villagers in Oting, Mon, is seen as having had a telling impact on reviving the demand to repeal AFSPA.

Why was AFSPA imposed on the Northeast in the first place?

• When the Naga nationalist movement kicked off in the  1950s with the setting up of the Naga National Council — the predecessor of the NSCN — Assam police forces allegedly used force to quell the movement.
• As an armed movement took root in Nagaland, AFSPA was passed in Parliament, and subsequently imposed on the entire state.
• In Manipur, too, it was imposed in 1958 in the three Naga-dominated districts of Senapati, Tamenglong and Ukhrul, where the NNC was active.
• It was imposed in the 1960s in the Kuki-Zomi dominated Manipur district of Churachandpur, which was under the sway of the Mizo insurgent movement, and extended to the rest of the state in 1979, when groups in the Meitei-dominated Imphal Valley groups began an armed insurgency.
• As secessionist and nationalist movements started sprouting in other Northeastern states, AFSPA started being extended and imposed.

Arguments Against AFSPA

• Symbol of Hatred: The Jeevan Reddy Committee, which was founded in 2004, criticised AFSPA as a symbol of hatred, persecution, and a tool of oppression.
• Immunity to Security Forces: AFSPA has been dubbed a “draconian Act” for the unrestricted authority it grants the military forces and the impunity that security officers have for their acts performed under the law. Under AFSPA, the “armed forces” have the authority to shoot to kill or demolish a structure based solely on suspicion.
• Human Rights Issue: The AFSPA’s activities have been criticised because people have died as a result of them. It’s been a contentious issue, with human rights organisations condemning it as being too forceful.
• Prolonged continuation: Despite a nearly 25-year ceasefire accord, the Union Government has been chastised for renewing the “disturbed region” tag on Nagaland every year to keep the AFSPA alive.
• Concerns of AFSPA in Manipur: Many protests over suspected extrajudicial executions by the security forces have taken place in Manipur throughout the years. The bullet-riddled body of Thangjam Manorama, who was reportedly raped and killed by a group of Assam Rifles troops in 2004 sparked outrage across the state. Irom Sharmila, often known as the Iron Lady of Manipur, is a towering figure who is well-known for her 16-year hunger strike in protest of AFSPA atrocities.

Arguments in Favour of AFSPA

• The AFSPA is described as a law that takes a straightforward approach to control criminal activity in disturbed areas.
• Fascist techniques and all groups, private and public, that engage in violence and attempt to pressure the government by organised violence must be controlled. As a result, the AFSPA is vital.

Important Criticisms of AFSPA and commissions regarding AFSPA

• When India presented its second periodic report to the United Nations Human Rights Committee in 1991, members of the UNHRC asked numerous questions about the validity of the AFSPA.
• They questioned the constitutionality of the AFSPA under Indian law and asked how it could be justified in light of Article 4 of the International Covenant on Civil and Political Rights, ICCPR.
• In 2012, the UN asked India to revoke AFSPA saying it had no place in Indian democracy.
• The Act has been criticized by Human Rights Watch as a “tool of state abuse, oppression and discrimination”.

Supreme Court judgment on AFSPA

1997 judgment on AFSPA

• In Naga People’s Movement for Human Rights vs Union of India 1997, a Constitution Bench ruled that the ability to use deadly force under Section 4(a) of the AFSPA should only be used in “certain circumstances.”
• A 1997 Supreme Court judgment advocated “caution and use of minimum force against our own people” in AFSPA regions.

Extra-Judicial Execution Victim Families Association (EEVFAM) case 2017

• The Supreme Court addressed the extrajudicial executions in 2016, clarifying that the bar under Section 6 of the AFSPA does not offer officers “complete immunity” from any investigation into their alleged misconduct.
• The government received severe criticism from the Supreme Court in 2016 for the continuance of AFSPA.

Reactions to the killing of 14 civilians by security forces in Nagaland

• Lok Sabha members condemned the killing of 14 civilians by security forces in Nagaland with some Opposition MPs calling for the repeal of the Armed Forces (Special Powers) Act (AFSPA) as well.
• Nagaland Chief Minister has also called for scrapping the Armed Forces (Special Powers) Act.
• Human rights bodies in India and beyond are debating the contentious AFSPA that gives unbridled powers to the security forces.
• Nagaland Chief Minister also criticised the Centre for extending the “disturbed area” tag on Nagaland every year to prolong the AFSPA despite a ceasefire agreement for almost 25 years.
• In the northeast, the AFSPA is in force in Assam, Nagaland, Manipur, the Tirap, Changlang and Longding districts of Arunachal Pradesh and areas falling within the jurisdiction of eight police stations of the State bordering Assam.
• For Jammu and Kashmir, the Armed Forces (Jammu and Kashmir) Special Powers Act, 1990, is in force.

-Source: The Hindu

5G Mobile Services In India

Context:

 India will get 5G mobile services — almost five years after the country took its first steps towards the launch of the next generation of mobile telephony. Prime Minister will launch 5G in select cities on October 1, while inaugurating the sixth edition of India Mobile Congress in New Delhi.

Relevance:

GS III- Science and Technology

Dimensions of the Article:

1. About 5G
2. Application of 5G
3. What are the key issues?
4. What benefits are likely to come with 5G?

About 5G

• 5G is the next generation of mobile broadband that will eventually replace, or at least augment 4G LTE connection and it  offers exponentially faster download and upload speeds.
• 5G will deliver multi-Gbps peak rates, ultra-low latency, massive capacity, and a more uniform user experience.
• This is in contrast to 4G link speeds in averaging 6-7 Megabit per second (Mbps) in India as compared to 25 Mbps in advanced countries.

Application of 5G

• 5G will help in creating cyber-physical networks which not only interconnect people, but also interconnect and control machines, objects, and devices. It will deliver new levels of performance and efficiency that will empower new user experiences and connect new industries.
• It will act as an enabler for the Industrial Revolution 4.0 and is expected to form the backbone of emerging technologies such as the Internet of Things (IoT) and machine to machine communications.
• 5G can also help make transport infrastructure more efficient by making it smart. It will enable vehicle-to-vehicle and vehicle-to-infrastructure communication, making driverless cars, among other things, a reality.
• Also, the primary applications of 5G will be the implementation of a sensor-embedded network that will allow real-time relay of information across fields such as manufacturing, consumer durables and agriculture.

What benefits are likely to come with 5G?

• 5G is the next generation cellular technology that will provide faster and more reliable communication with ultra low latency.
• As per the set standards, with 5G, the peak network speeds are expected to be in the range of 2-20 Gbps as opposed to about 25 Mbps on current 4G networks.
  • In India, however, 4G speeds average at around 6-7 Mbps, but are picking up gradually.
• It is expected that with 5G technology, consumers will be able to download data heavy content such as 8K movies and games with better graphics in just a few seconds.
• The users will need to update to 5G-enabled devices to access the network, if they are not already using one.
• However, it is likely that the primary use of the technology will go beyond delivery of services on personal mobile devices.
  • 5G is expected to form the backbone of emerging technologies such as IoT and machine to machine communications, thereby supporting a much larger range of applications and services, such as tele-surgery and real time data analytics.
• Ultra low latency offered by 5G makes the technology desirable for such use cases.
  • Latency is the amount of time data takes to travel between its source and destination.
• As per a report by a government panel on 5G, even after the entry of 5G into the Indian networks, the earlier generation mobile technologies — 2G, 3G and 4G, will continue to remain in use and may take 10 or more years to phase out.
• 5G is expected to create a cumulative economic impact of $1 trillion in India by 2035, the report added.

Are the operators launching 5G on the same technology?

• 5G networks are deployed mainly on two modes: standalone and non-standalone.
• Both architectures have their advantages and disadvantages, and the path chosen by operators primarily reflects their view of the market for the new technology, and the consequent rollout strategy.
• In the standalone mode, which Jio has chosen, the 5G network operates with dedicated equipment, and runs parallel to the existing 4G network, while in the non-standalone mode, the 5G network is supported by the 4G core infrastructure.
• Given that the non-standalone networks are built on existing infrastructure, the initial cost and the time taken to roll out services through this track is significantly less than standalone networks.
• Jio has committed an investment of Rs 2 lakh crore for its standalone 5G network.

-Source: Indian Express

Chief of Defence Staff (CDS)

Context:

The Government appointed former Eastern Army Commander Lt. General Anil Chauhan as the next Chief of Defence Staff (CDS). The appointment comes more than nine months after the post fell vacant following the death of General Bipin Rawat.

Relevance:

GS II- Polity and Governance

Dimensions of the Article:

1. Who is CDS?
2. Functions of CDS
3. Need of such a post

Who is CDS?

• The Chief of Defence Staff of the Indian Armed Forces (CDS) is the military head and permanent Chairman of the Chiefs of Staff Committee (CoSC) of the Indian Armed Forces.
• The Chief of Defence Staff is the highest-ranking uniformed officer on active duty in the Indian military and chief military adviser to the Minister of Defence.
• The Chief also heads the Department of Military Affairs.
• The CDS is assisted by a vice-chief, the Chief of Integrated Defence Staff.
• CDS was recommended by  Kargil review committee after Kargil war.
• In 2017, intelligence and security officials had said that the absence of a CDS was hampering India’s combat capabilities

Functions of CDS

• To act as the Principal Military Advisor to Raksha Mantri on all Tri-Service matters.
• To administer the Tri-Service organizations/agencies/commands.
• To be a member of Defence Acquisition Council chaired by Raksha Mantri.
• To function as the Military Advisor to the Nuclear Command Authority.
• To bring about jointness in operation, logistics, transport, training, support services, communications, repairs and maintenance, etc of the three Services.
• To implement Five-Year Defence Capital Acquisition Plan and Two-Year roll-on Annual Acquisition Plans, as a follow up of Integrated Capability Development Plan.
• To bring about reforms in the functioning of three Services with the aim to augment combat capabilities of the Armed Forces by reducing wasteful expenditure.

Need of such a post

• To usher in reforms in the higher defence management Centre.
• For a more streamlined system of reporting and decision making.

Interest Rates On Small Savings Schemes

Context:

The interest rate on small savings schemes has not been revised since the first quarter of 2020-21. The Centre has announced increases of 0.1-0.3 percentage points in interest rates payable on five small savings instruments (SSIs) marking the first increase in small savings rates since January 2019.

Relevance:

GS III- Indian Economy

Dimensions of the Article:

1. About Small Saving Schemes/Instruments
2. What are the different saving schemes?

About Small Saving Schemes/Instruments

• They consist of 12 instruments and are the main source of household savings in India.
• Depositors receive a guaranteed interest rate on their funds.
• They are popular as they provide returns higher than bank fixed deposits, sovereign guarantee and tax benefits.
• The National Small Savings Fund receives payments from all small savings instruments (NSSF).
• Small savings have become a crucial source of funding the government deficit, particularly when the Covid-19 outbreak caused the deficit to inflate and further borrowing became necessary.

Determination of Rates:

• Interest rates on small savings schemes are reset on a quarterly basis, in line with the movement in benchmark government bonds of similar maturity. The rates are reviewed periodically by the Ministry of Finance.
• The Shyamala Gopinath panel (2010) constituted on the Small Saving Scheme had suggested a market-linked interest rate system for small savings schemes.

What are the different saving schemes?

Small savings instruments can be classified under three heads:

• Postal Deposits (comprising savings account, recurring deposits, time deposits of varying maturities and monthly income scheme).
• Savings Certificates: National Small Savings Certificate (NSC) and Kisan Vikas Patra (KVP).
• Social Security Schemes: Sukanya Samriddhi Scheme, Public Provident Fund (PPF) and Senior Citizens‘ Savings Scheme (SCSS).

-Source: Indian Express