23-May-2024-Daily-Current-Affairs

A VEGETABLE TRIUMVIRATE, INFLATION AND THE TAKEAWAY 

TOPIC: (GS3) ECONOMY – SOURCE: THE HINDU 

Inflation, a crucial economic indicator, reflects changes in the general price level and cost of living. In India, the Consumer Price Index (CPI) measures inflation, with a basket of 299 items including vegetables, which hold a 6.04% weight.  

In FY2023-24, vegetable prices rose by 15% year-on-year, showing significant volatility. For example, prices fell 0.7% in June but surged 37.4% in July.  

This highlights the substantial impact of TOP on inflation and the need for effective policy measures to manage their price volatility. 

Inflation and CPI in India 

• Inflation Measurement: In India, inflation is measured by the Consumer Price Index (CPI), based on the Laspeyre’s price index. 
• CPI Basket: Comprises 299 items, with vegetables holding a 6.04% weightage. 
• Significance of TOP: Tomato, Onion, and Potato (TOP) have a 2.2% weight in CPI and greatly influence food and headline inflation. 

Vegetable Price Volatility 

• FY2023-24 Price Surge: Vegetable prices increased by 15% year-on-year. 
• Monthly Fluctuations: Prices dropped 0.7% in June and surged 37.4% in July. 
• Impact on Inflation: Vegetables contributed 30% to inflation in early 2024; tomatoes alone contributed 18.1% in July. 

Price Volatility Measures 

• Coefficient of Variation (CoV): Measures price volatility. 
• TOP Volatility: CoV of 5.2 for TOP (Jan 2015 – Mar 2024), higher than vegetables (CoV=3.0), food (CoV=0.6), and headline inflation (CoV=0.3). 
• TOP Price Fluctuations: Inflation ranged from -36.6% (Sep 2021) to 132.0% (Dec 2019). 
• Policy Interventions 
• Challenges for Farmers: Price volatility affects farmers who lack Minimum Support Prices and sell to private traders. 

Proposed Solutions: 

• Improve agricultural value chains and cold storage. 
• Ensure better prices for farmers. 
• Reduce input costs for fertilizers and pesticides. 
• Policy Actions: Short-term measures like export bans are insufficient. Farmers demand long-term solutions like Minimum Support Prices for stability. 

Wholesale Price Index (WPI) and Consumer Price Index (CPI) 

Wholesale Price Index (WPI) and Consumer Price Index (CPI) are both important metrics used to track inflation, but they measure price changes at different points in the supply chain: 

• Wholesale Price Index (WPI): Tracks the average change in prices of goods at the wholesale level. This means it reflects the price fluctuations businesses experience when they buy and sell goods in bulk quantities. 
• Consumer Price Index (CPI): Measures the average change in prices of a basket of goods and services that consumers typically purchase. It reflects the inflation that people experience in their everyday lives. 

Headline Inflation: 

• Represents the overall change in the prices of a basket of goods and services. It’s the raw inflation figure reported monthly through the Consumer Price Index (CPI). 
• This basket includes a variety of items, encompassing food and energy prices. 

Core Inflation: 

• Focuses on the inflation rate excluding food and energy. Since food and energy prices tend to fluctuate more than other goods, core inflation provides a less volatile picture of underlying inflationary trends. 
• Economists often use core inflation to gauge the health of the economy and set monetary policy. 

Multiple Choice Question: 

1. Consider the following statements regarding inflation in India:

1. The inflation rate in India is primarily measured by the Wholesale Price Index (WPI). 

1. The Consumer Price Index (CPI) includes changes in the prices of services like education and transportation. 

Which of the following statements is/are correct? 

1. 1 only 

1. 2 only 

1. Both 1 and 2 

1. Neither 1 nor 2 

ANSWER: B 

EXPLANATION 

While WPI was historically the primary measure, CPI has become more important in recent years. 

CPI considers a basket of goods and services, including education and transportation, reflecting the inflation consumers experience. 

RBI TO TRANSFER ₹2,10,874 CR. SURPLUS TO CENTRE FOR FY24 

TOPIC: (GS3) ECONOMY – SOURCE: THE HINDU 

The Union government of India has received a significant windfall gain from the Reserve Bank of India (RBI), which approved a record surplus transfer of ₹2,10,874 crore for the fiscal year 2023-24. This amount is more than double the ₹87,416 crore transferred in the previous fiscal year, FY23. 

 The substantial surplus transfer is expected to aid in fiscal consolidation efforts, providing a boost to the government’s financial management. The RBI also increased its Contingent Risk Buffer (CRB) to 6.50% for 2023-24, up from 6% in the previous year. 

Economic Capital Framework (ECF): 

• The surplus was calculated based on the Economic Capital Framework adopted by the RBI on August 26, 2019. 
• This framework was recommended by the Expert Committee to review the existing Economic Capital Framework of the RBI. 

Economist’s View: 

• the fiscal consolidation program is on track, with expectations for the final budget in July. 
• The larger dividend resulted from higher RBI income from both domestic and foreign assets, increasing the profits booked by the central bank. 

Windfall Tax  

A windfall tax is a levy imposed on companies that experience exceptionally high profits due to unforeseen circumstances, not necessarily due to their own actions or strategic decisions. These circumstances can be: 

• External events: Global conflicts, natural disasters, or sudden shifts in supply and demand. 
• Government policies: Changes in regulations or tax structures leading to unintended benefits for specific industries. 

The purpose of a windfall tax is twofold: 

• Redistribute wealth: Capture a portion of the unexpected profits and use them for social welfare programs or to ease the burden on consumers facing higher prices due to the windfall gains. 
• Discourage speculation: Disincentivize companies from exploiting temporary market conditions for excessive profits. 

Windfall Tax in India 

India recently implemented a windfall tax in July 2022, targeting the domestic oil and gas sector. This came after a surge in global oil prices due to the Russia-Ukraine war, leading to significant profit margins for Indian oil producers while consumers faced rising fuel costs. 

The windfall tax was levied as a special additional excise duty on the export of refined petroleum products like: 

• Diesel 

• Gasoline 
• Aviation Turbine Fuel (ATF) 

The tax aimed to achieve several objectives: 

• Increase domestic fuel availability: By making exports less profitable, encourage refiners to prioritize supplying the domestic market and stabilize fuel prices. 
• Generate additional revenue: The government could use the tax revenue to fund social programs or offset rising import costs. 
• Mitigate inflationary pressures: By ensuring adequate domestic fuel supplies, the tax could help moderate inflation caused by high energy prices. 

Current Status: 

• As of May 2024, the windfall tax on petrol, diesel, and ATF remains at zero. However, the tax on crude oil has been revised and reduced to ₹4,100 per tonne, reflecting the moderation in global oil prices. 
• The windfall tax on the Indian oil and gas sector is a recent example of how governments can utilize this tool to manage unexpected economic situations and ensure a fairer distribution of windfall gains. 

BIMAL JALAN COMMITTEE 

The economic capital framework aims to balance the central bank’s autonomy with the government’s developmental objectives. The Bimal Jalan-led panel suggested a comprehensive risk capital framework to ensure the adequacy of the RBI’s reserves.  

Key recommendations from the committee include: 

• Contingency Risk Buffer (CRB): The RBI should maintain the CRB, which acts as the country’s financial stability fund, within the range of 5.5% to 6.5% of the RBI’s balance sheet. 
• Periodic Reviews: The Economic Capital Framework (ECF) should be reviewed every five years, with intermediate reviews if significant changes in the RBI’s risks or operating environment occur. 
• Accounting Year Alignment: The RBI’s accounting year should be synchronized with the fiscal year, changing from the current July-June to April-March starting from the financial year 2020-21. This alignment would improve the cohesion of monetary policy projections and reports. 
• Interim Payout Structure: The interim payout structure should generally be eliminated. Interim dividends should only be paid in extraordinary circumstances. 

All these recommendations have been accepted by the RBI, reinforcing the bank’s commitment to maintaining financial stability and supporting government objectives. 

Multiple Choice Question: 

1. Consider the following statements regarding the Economic Capital Framework (ECF) of the Reserve Bank of India (RBI):

1. The Economic Capital Framework aims to balance the RBI’s autonomy with the government’s developmental objectives. 

1. The Bimal Jalan panel recommended maintaining the Contingency Risk Buffer (CRB) within the range of 5.5% to 6.5% of the RBI’s balance sheet. 

1. The RBI’s accounting year was recommended to be aligned with the fiscal year, changing from July-June to April-March starting from the financial year 2020-21. 

Which of the above statements is/are correct? 

1. 1 and 2 only 

1. 2 and 3 only 

1. 1 and 3 only 

1. 1, 2 and 3 

Answer: D  

EXPLANATION 

The Economic Capital Framework aims to balance the RBI’s autonomy with the government’s developmental objectives. 

The Economic Capital Framework (ECF) is designed to create a balance between the need for the Reserve Bank of India (RBI) to operate independently and the government’s objectives for economic development. The framework ensures that the RBI has adequate capital to manage financial risks while also enabling it to transfer surplus reserves to the government when appropriate. 

The Bimal Jalan panel recommended that the RBI maintain the Contingency Risk Buffer (CRB), which serves as a fund for financial stability, within the range of 5.5% to 6.5% of the RBI’s balance sheet. This buffer is crucial for addressing unforeseen financial stability risks. 

The RBI’s accounting year was recommended to be aligned with the fiscal year, changing from July-June to April-March starting from the financial year 2020-21. 

WHEN CONTROL IS DISGUISED AS REFORM 

TOPIC: (GS2) POLITY AND GOVERNANCE – SOURCE: THE HINDU 

Recent Judicial Decisions and Their Impact 

• February 15: Supreme Court declared electoral bonds unconstitutional, emphasizing the right to know over anonymity. 
• May 10: Interim bail granted to Delhi Chief Minister Arvind Kejriwal, rejecting the notion of special privileges for politicians. 
• May 15: Bail granted to Prabir Purkayastha, citing the lack of written communication of arrest grounds, which invalidated the arrest. 

Challenges and Perceptions: 

• These decisions challenge state excesses and negatively impact the ruling party’s interests. 
• Critics have accused the Supreme Court of judicial abdication and collaboration with the executive in recent years. 
• The recent judgments are seen as a bold move, especially in an election year. 
• Digital Media and Judicial Legitimacy 

Impact of Digital Media: 

• Digital platforms provide immediate commentary on judicial proceedings. 
• Live tweeting and streaming of court sessions have increased public engagement. 

Abuse and Misinformation: 

• Digital campaigns against the judiciary exploit public dissatisfaction with the slow justice system, nepotism, and lack of diversity in higher judiciary. 
• These campaigns often disguise themselves as calls for reform but aim for executive control over the judiciary. 

Study by Joyojeet Pal and Sheyril Agarwal 

Findings: 

• Analyzed data from X (formerly Twitter) showing spikes in negative comments on days when the Chief Justice took positions against the BJP-led government. 
• Noted that attacks were linked to highly polarized digital influencers supporting the BJP. 
• Highlighted the need to protect the judiciary from partisan attacks aiming at institutional capture. 

The Way Forward 

Public Awareness and Action: 

• Recognize threats to judicial independence and scrutinize reform proposals. 
• Address issues like the collegium system and enhance diversity in appointments. 

Restoring Trust: 

• Improve service delivery and counter misinformation through consistent public communication. 
• Acknowledge the judiciary as a crucial, albeit imperfect, protector of constitutional rights. 

Broader Civic Vision: 

• Focus on the judiciary’s role beyond political dominance, ensuring it remains a counter-majoritarian institution protecting citizens’ rights. 

Multiple Choice Question: 

Consider the following statements about the Supreme Court of India: 

1. The Supreme Court can review its own judgments. 

1. The President can refer any question of law or fact to the Supreme Court for its opinion. 

Which of the statements given above is/are correct? 

1. 1 only 

1. 2 only 

1. Both 1 and 2 

1. Neither 1 nor 2 

Answer: C 

EXPLANATION 

The Supreme Court can review its own judgments. This power is granted by Article 137 of the Constitution, which states that the Supreme Court has the power to review any judgment pronounced or order made by it. 

 This allows the court to correct errors in its previous decisions and ensure consistent interpretation of the law. 

The President can refer any question of law or fact to the Supreme Court for its opinion. This is known as the Advisory Jurisdiction of the Supreme Court and is covered under Article 143. The President can seek the court’s opinion on any matter he deems fit, but the advice is not binding on the government. 

RANGELANDS 

TOPIC: (GS3) ENVIRONMENT – SOURCE: INDIAN EXPRESS 

The newly released “Global Land Outlook Thematic Report on Rangelands and Pastoralists” by the United Nations Convention to Combat Desertification has revealed that rangelands are experiencing a ‘silent decline’. 

About Rangelands 

Rangelands are natural grasslands where livestock and wild animals graze and forage. 

Vegetation includes tallgrass prairies, steppes, desert shrublands, shrub woodlands, savannas, chaparrals, and tundras. 

Cover about half of Earth’s land surface and half of western North America. 

Reasons for Degradation: 

• Conversion to cropland and other land uses due to population growth and urban expansion. 
• Increased demand for food, fiber, and fuel. 
• Overgrazing and abandonment. 
• Policies that encourage overexploitation. 

Significance: 

• Provide livestock forage, wildlife habitat, water, mineral resources, and wood products. 
• Support wildland recreation, open space, and natural beauty. 
• Economic engine for many countries and integral to cultural identity. 
• Home to one quarter of the world’s languages and numerous World Heritage Sites. 

• Support the livelihoods of two billion people, including small-scale herders, ranchers, and farmers, many of whom are poor and marginalized. 

BHARAL AND HIMALAYAN IBEX 

TOPIC: (GS3) ENVIRONMENT – SOURCE: TIMES OF INDIA 

Wildlife authorities in Lahaul & Spiti, Himachal Pradesh, are conducting surveys to estimate the population of blue sheep (bharal) and Himalayan ibex. 

These animals are the main prey of the iconic snow leopard. 

About Bharal (Blue Sheep) 

Scientific Name: Pseudois nayaur 

Distribution: 

Found in India, Bhutan, China, Myanmar, Nepal, and Pakistan. 

Physical Features: 

• Medium-sized caprids, 115 to 165 cm (45 to 65 in) long, with a tail of 10 to 20 cm (3.9 to 7.9 in). 
• Shoulder height: 69 to 91 cm (27 to 36 in). 
• Males are slightly larger than females. 
• Slate grey coat with a bluish shine, white underparts, and black chest and legs. 
• Unique horns that curve upwards and back. 

Behavior: 

Active throughout the day, alternating between feeding and resting on grassy mountain slopes. 

Conservation Status: 

• IUCN Red List: Least Concern 

• Wildlife Protection Act 1972: Schedule 1 

About Himalayan Ibex 

Scientific Name: 

• Capra sibirica hemalayanus 

Distribution: 

• Native to the Himalayan region of India, Pakistan, Tibet, and Nepal. 
• Found in high-altitude regions (3,000 to 5,800 meters) in states like Jammu and Kashmir, Himachal Pradesh, and Uttarakhand. 

Physical Features: 

• Adults weigh about 90 kgs and stand around 40 inches tall. 
• Males have large, curved horns with front notches. 
• Coat is light brown to reddish-brown with a white belly and black and white leg markings. 
• Thick woolly coat in winter, shed in early summer. 
• Coat color ranges from pale brown to dark brown with a darker dorsal stripe. 

Behavior: 

• Found in small herds, sometimes up to 50 individuals. 
• Can run at speeds of up to 50 km/h. 

Conservation Status: 

• IUCN Red List: Near Threatened 

Significance of the Survey 

• Essential for understanding and managing the populations of bharal and Himalayan ibex. 
• Important for the conservation efforts of the snow leopard, which preys on these species. 

EMBLICA CHAKRABARTYI 

TOPIC: (GS3) ENVIRONMENT – SOURCE: DOWN TO EARTH 

Scientists have recently announced the discovery of a new plant species, Emblica chakrabartyi, found in Adichilthotti within Kerala’s Edamalayar forest range. 

Family and Distribution: 

• Belongs to the gooseberry family (Phyllanthaceae). 
• The genus Emblica has 55 species globally; this is the eleventh species found in India. 

Physical Features: 

• Grows to about 2 meters in height. 
• Leaves: Large, shiny, elongated oval shape, up to 13 cm long. 
• Flowers: Bloom and bear fruit from December to June. 
• Male flowers: Found in inflorescences. 
• Female flowers: Found singly on the leaf axils. 
• Flowers have six yellowish-green petals. 
• Fruits: Brown to black when ripe. 
• Seeds: Black, about 8-9 mm in diameter. 

Habitat: 

• Typically grows as shrubs in tropical rainforests. 

X-CHROMOSOME 

TOPIC: (GS3) SCIENCE AND TECHNOLOGY – SOURCE: INDIAN EXPRESS 

Scientists have found a molecular connection between altered X-chromosome inactivation and autoimmune diseases. 

About the X-Chromosome: 

• One of the two human sex chromosomes (other is the Y chromosome). 
• Humans have 23 pairs of chromosomes: 22 pairs of autosomes and 1 pair of sex chromosomes. 
• Females typically have two X chromosomes, males have one X and one Y chromosome. 
• Men inherit their X chromosome from their mother, and Y chromosome from their father. 
• Women inherit one X chromosome from each parent. 

Genetic Significance: 

• Represents about 5% of total DNA in females and 2.5% in males. 
• Contains 900 to 1,400 genes for protein production. 

X-Inactivation (Lyonization): 

• Early in embryonic development, one X chromosome in females is randomly and permanently inactivated in cells other than egg cells. 
• Ensures only one functional X chromosome in each cell. 
• Random inactivation leads to some cells using the X chromosome from the mother, others from the father. 

Related Disorders: 

• Numerical disorders from missing, additional, or malformed X chromosomes: 
• Klinefelter’s syndrome: Male with one or more extra X chromosomes. 

• Triple X syndrome: Female with one extra X chromosome. 
• Turner syndrome: Female with one normal and one missing/abnormal X chromosome. 

ARAB LEAGUE 

TOPIC: (GS2) INTERNATIONAL RELATIONS – SOURCE: HINDUSTHAN TIMES 

At a recent Arab League Summit, the UN chief called for a Gaza ceasefire and regional unity. 

About the Arab League: 

• Type: Intergovernmental organization. 
• Region: Includes all Arab states in the Middle East and North Africa. 
• Establishment: Founded in Cairo, Egypt, in 1945, following the 1944 Alexandria Protocol. 
• Headquarters: Cairo, Egypt. 

Mandate: 

• Strengthen relations and coordinate policies among member states. 
• Cooperate on political, security, economic, and legal issues. 

Membership: 

• Consists of 22 member states. 
• India has observer status.